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Hindsight Bias: A By-product of Knowledge Updating

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Author Info
Hoffrage, Ulrich () (Sonderforschungsbereich 504)
Hertwig, Ralph (MPI for Human Development)
Gigerenzer, Gerd () (MPI for Human Development, Berlin)
Abstract

After feedback, peopleãs recollections of judgments they made earlier differ systematically from their actual original judgments: Their recollection judgments are typically closer to the truth than the original judgments have been. It has been proposed that this phenomenon¨the so-called hindsight bias¨may be due to cognitive reconstruction of the prior judgment. We propose a theoretical model of this reconstruction process. The modelãs crucial assumptions are that knowledge is updated after feedback, and that reconstruction is based on the updated knowledge. By using a simple inferential heuristic (Take The Best, Gigerenzer & Goldstein, 1996), this model explains at the level of individual judgments why hindsight bias does or does not occur, and even why it sometimes reverses. Two studies show (a) that knowledge after feedback is indeed systematically shifted toward feedback, (b) that our model accounts for 75 percent of cases in which either hindsight bias or reversed hindsight bias occurred, and (c) that assisting knowledge recall reduces hindsight bias. We conclude that hindsight bias can be seen as a by-product of an adaptive process, namely the updating of knowledge after feedback.

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Publisher Info
Paper provided by Sonderforschungsbereich 504, Universität Mannheim & Sonderforschungsbereich 504, University of Mannheim in its series Sonderforschungsbereich 504 Publications with number 99-33.

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Length: 46 pages
Date of creation: 30 Mar 1999
Date of revision:
Handle: RePEc:xrs:sfbmaa:99-33

Note: Financial Support from the Deutsche Forschungsgemeinschaft, SFB 504, at the University of Mannheim, is gratefully acknowledged.
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