#69 I knew it all along!

I knew it all along!

Have you ever chosen an investment, started a relationship, or made a decision at work that turned out badly? 

Did you find yourself ruminating on the signs you should have noticed and kicking yourself for not making a different decision?

Hindsight bias – also known as the “knew-it-all along” effect – is the tendency to view an unpredictable event in retrospect and believe it was predictable.  As explained in this podcast, one reason we do this is because we want the world to feel orderly. We build a logical narrative and selectively choose information to support it.

Hindsight bias can make us judge our own – and others’ – decisions too harshly.  On the other hand, it can also lead to overconfidence in our predictions. 

To counteract hindsight bias, write down important decisions when you make them, along with the factors involved – this can help you remember what you actually understood at that time.