PSYCHOLOGY
psychology
bias
memory
prediction
Hindsight Bias: I Knew It All Along
After an event happens, we convince ourselves we predicted it. This prevents us from learning from surprise and makes us overconfident in our future predictions.
Baruch Fischhoff• 5 min read
The Historian's Fallacy
Before the 2008 financial crash, almost no one predicted it. After it happened, everyone said, "It was obvious! Look at the housing bubble!" This is Hindsight Bias. Once we know the outcome, we rewrite our memory to believe we saw it coming. We connect the dots backwards and assume the line was straight.
The Danger
"I knew it" is a dangerous phrase. It stops you from asking, "Why didn't I actually predict it?" It makes you think the world is predictable, when it is actually chaotic. Keep a journal of your predictions. You will be shocked at how wrong you usually are.