Understanding Hindsight Bias

What is hindsight bias?

• The tendency to believe an event was predictable after it has happened.

• The ability to predict future events accurately.

• The habit of forgetting past predictions.

• The skill of recalling past events with perfect accuracy.

Who was the first to document the concept of hindsight bias?

• Dorothy Dietrich

• Matthew Olson

• Maruch Fishoff

• Colin Kimmerer

In Fishoff's study, what was the effect of providing a known outcome to participants?

• Participants were less confident in their predictions.

• Participants were more likely to see the outcome as obvious.

• Participants ignored the outcome provided.

• Participants saw the outcome as less obvious.

How can hindsight bias affect investors?

• It makes them more cautious in their investments.

• It leads them to regret not investing earlier in obvious market changes.

• It causes them to invest in high-risk stocks.

• It helps them predict market trends accurately.

What is a suggested strategy to mitigate hindsight bias?

• Ignore the outcomes of past events.

• Reassess your predictions after learning the outcome.

• Always trust your initial instincts.

• Avoid making any predictions.