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What Is 'Hindsight Bias'?

Hindsight Bias is the tendency to kick yourself for things "you should have known."

Every decision you'll ever make will be lacking some information. That's why we use Interpretation to fill in the blanks.

It's important to realize that the feeling of "feeling stupid" for not predicting an outcome is irrational, and that there's nothing you can do to go back and change it. Hindsight Bias becomes destructive if you judge yourself or other for not knowing the unknowable.

Reinterpret your past mistakes in a positive way, focus on what's ahead.

Josh Kaufman Explains 'Hindsight Bias'

How do you feel when you realize that you've made a mistake? Hindsight Bias is the natural tendency to kick yourself for things you "should have known."

If you lose your job, you "should have known it was coming." If the price of a particular stock you own drops 80% overnight, you "should have sold it." If you launch a product and no one buys it, you "should have known it wouldn't work."

Baloney. If you knew then what you know now, you wouldn't have done what you did.

Every decision you ever make will be based on incomplete information - we have to use Interpretation to fill in the blanks. Since you're not omniscient, you'll always have more information when you evaluate the results of your actions than you had when you actually made the decision. As a result, it's very easy to feel stupid if things don't turn out the way you expected.

It's important to realize that these feelings are irrational-your decisions were based on the best information you had at the time, and there's nothing you can do now to change them.

Don't feel bad about things that you "should have seen" or "should have done." Changing the past is outside of your Locus of Control, so there's no sense in wasting energy on self-doubt, wondering what might have been. Hindsight Bias becomes destructive if you negatively judge yourself or others for not knowing the unknowable.

As the saying goes, "hindsight is 20-20." Reinterpret your past mistakes in a constructive light, and focus your energy on what you can do right now to move in a positive direction.

Questions About 'Hindsight Bias'

• Do you still feel bad about something that happened in the past?
• How does your understanding of sunk cost and hindsight bias change the way you think about that situation?
• Is there anything that you can to improve the situation instead of continuing to feel bad?

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"Finish each day and be done with it. You have done what you could. Some blunders and absurdities no doubt crept in; forget them as soon as you can. Tomorrow is a new day; begin it well and serenely and with too high a spirit to be encumbered with your old nonsense."

Ralph Waldo Emerson, essayist and poet

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