I knew it all along 🤓—Hindsight bias
Me now, me then, how could you not see it coming, and challenge for the week.
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As you know by now, we learn to dodge one mental mistake each week.
If this is your first email from me or in case you didn’t get a chance to read last week’s post (it was about fixing first impressions and deciding on whether or not to feed your dog fallen blueberries 😅) please read it here:
Week 1 — I see only what I believe 👀—Confirmation bias
Our focus this week is the mental mistake we tend to make while predicting things in the past! It’s called the hindsight bias.
Happy reading!
Everyone knows at least one person who’s always saying, “I knew that was going to happen!”.
It can get pretty annoying when the same person claims to have known it all along, “I knew the market was going to crash”, “I knew COVID would strike.”, “I knew their marriage wouldn’t last”, “I knew it would rain.”, etc.
The funny thing is that these people claim these predictions after the event has happened, not before.
If you knew the market was going to crash, why didn’t you sell all your stocks? If you knew COVID would strike, why didn’t you alert the authorities? If you knew the couple wasn’t the right match, why didn’t you talk your friend out of it? If you knew it’d rain, why didn’t you carry the freakin umbrella ☔️?!
People tend to be an expert at predicting an event after learning about the outcome of that event.
When they say, “I knew it!”, they aren’t lying, technically. They truly believe that they saw it coming. It is a false belief though.
This mental mistake of believing you knew the thing after it has happened is called the hindsight bias.
For the definition lovers:
The tendency of overestimating the accuracy of your prediction after learning the outcome of an event is called hindsight bias.
How well do you know your past self?
In 1972, researchers Baruch Fishoff and Ruth Beyth conducted a survey.
Richard Nixon, then American president was about to visit China and Russia.
The survey asked people to predict the probability of 15 political initiatives like:
Would the president of China agree to meet the American president?
Would America grant diplomatic recognition to China?
After decades of friction, can America and Russia agree on anything significant?
After Nixon returned from his travels, the same people were asked to recall their predictions. The results were shocking.
People conveniently changed their previous claims:
If an event had occurred, people exaggerated their previous claim, “I told you it was highly likely!”
If an event didn’t occur, people wrongly recalled their previous claim, “I told you it was unlikely.”
People tend to revise their past beliefs in light of the new information.
We think we understand our past self 💯. The reality is different. Our beliefs keep updating every now and then. And our mind doesn’t save the version history!
I have experienced it firsthand. I use a website called futureme.org. It lets you write digital letters to your future self. The email gets delivered on a future date of your choice. e.g, a month from now or years from now!
When I receive those letters, more often than not, I don’t recall having those thoughts. It feels like I understand this person but I don’t remember thinking like that.
So what?
By now, hopefully, you’d agree that hindsight bias can turn you into an annoying person with the “I knew it!” rant 🤪.
But that’s not it.
When you think you could see it coming, you blame others who couldn’t:
“How could you not see that pothole before driving over it?”
“How could you not see that this person is a jerk?”
“How could you not know that this show was canceled before we hailed the taxi?”
The reality:
If you were driving and looking in the mirror for other cars before making a turn, you could have missed that pothole.
If the person was friendly and helpful to you multiple times, you wouldn’t think of them as a jerk.
You wouldn’t think of calling beforehand to confirm if the show was still on. It’s because shows don’t normally get canceled.
Things just seem obvious after they happen.
We commonly make this mental mistake as a parent, a partner, a friend, or a colleague blaming others for their wrong judgment.
Sometimes, we blame ourselves unnecessarily. If you are in a profession that requires heavy decision-making for others (most of my dearest friends are!) like financial advisers, technology or design consultants, founders, physicians, or diplomats, you are more prone to hindsight bias.
When the outcome is bad, not just the client but you start to blame yourself for not taking the right decision.
You did, indeed take the right decision. It was right at that moment.
How do we minimize the hindsight bias?
The next time you have an urge to blurt out “I knew it!”, ask yourself first:
“What did you do with that information?”
If you did nothing about it, it means you didn’t believe that it was going to happen.
Before you tell your spouse or partner, “I told you so”, hold your horses. It’s more likely that you didn’t really tell. You just think you did 🧐.
Besides the above “I knew it” and “I told you so”, other red alert signs for hindsight bias are “would have”, “should have”, and “could have” 🚫.
You’re not good at predicting something if you’re predicting in the past tense.
When making long-term decisions, psychologist Daniel Kahneman suggests choosing one of the extremes—Either be thorough or just wing it!
It’s the middle ground that leads to regret. Regret is what we want to save ourselves from.
Hindsight is worse when you think a little, just enough to tell yourself later, “I almost made a better choice.”
— Daniel Kahneman in Thinking, Fast and Slow
Challenge for the week
Write a note to your future self one month from now, predicting events that you think you are good at predicting. If you don’t know what those events are, ask around your spouse, kids, and friends..what do you say “I knew it” most to?
For example:
Will COVID get better or worse in a month in my country of residence?
Predict the future of a stock that you have invested in or a game, lottery, an election, etc.
Predict how will you, your friend, or your kid perform in an upcoming exam, interview, job appraisal, etc.?
Put your note in an envelope, label it, “To be opened on <a month from today’s date>”.
Or you can write an email to your future self using futureme.org.
Either way, let your future self decide how good you are at predicting events.
Never get caught up in the “I knew it was going to happen” trap.
Thank you for reading! If you enjoyed the read, please share it with a friend 🤗.
Never thought the way expalined here.......point noted!
Enjoyed it.