Hindsight Bias 
    Hindsight Bias - the tendency to exaggerate, after learning an outcome, one's ability to have foreseen how 
something turned out. A.k.a as the I-knew-it-all-along phenomenon. Conductive to arrogance.     

    As defined above it would seem that there is nothing good about hindsight bias. The article below 
counterbalancesthis negativity.     

     "Hindsight Bias - NOT just a convenient memory enhancer but an important part of an efficient 
memory system.     

    It is said that hindsight is 20-20. According to new research, hindsight bias -- the way our impression of 
how we acted or would have acted changes when we learn the outcome of an event -- is actually a 
by-product of a cognitive mechanism that allows us to unclutter our minds by discarding inaccurate 
information and embracing that which is correct.     

     Researchers in the Adaptive Behavior and Cognition (ABC) research group at the Max Planck Institute 
for Human Development in Berlin, Germany, have developed a model of hindsight bias called 
Reconstruction After Feedback with Take the Best (RAFT). Drs. Ulrich Hoffrage, Ralph Hertwig and Gerd 
Gigerenzer, authors of the RAFT model, published their research in the May issue of the Journal of 
Experimental Psychology: Learning, Memory and Cognition, published by the American Psychological Association.     

    Hindsight bias can occur when people make a judgment or choice and are later asked to recall their judgment. 
If, in the interim, they're told what the correct judgment would have been, their memory of their own judgment may 
become biased toward the new information. For instance, suppose a person was asked to estimate how many votes 
John McCain would get in the Michigan primaries. If before the election, he estimated 30%, and then learned that 
the actual figure was 50%, he may later recall that his answer was 40%.     

    The basic idea of the RAFT model is that any feedback or correct information a person receives after he has given 
his initial judgment automatically updates the knowledge base underlying the initial judgment. If a person cannot 
remember this initial judgment, he will reconstruct it from what he currently knows about the situation. And what 
he currently knows is the updated version of what he used to know. So while feedback does not directly affect a 
person's memory for the original response, it indirectly affects the memory by updating the knowledge used to 
reconstruct the response. Rather than thinking of hindsight bias as a flaw of human cognition, as previous research 
suggests, Hoffrage, et al. argue that it's a by-product of an adaptive mechanism - one that makes human memory 
more efficient.     

    To test their RAFT model, the researchers set up experiments in which, for instance, 80 student volunteers at the 
University of Chicago were provided with nutrition information about certain foods such as fat content, number of 
calories and protein content. Then participants were shown a list of the same foods split into pairs and the researchers 
asked them to decide which item in the pair had the higher cholesterol content. They were also asked how much 
confidence they had in their choice. Either a day or a week later they returned to the laboratory and were asked to 
recall the decisions they made about the food-item pairs and how confident they were in their decisions. Some 
participants were simply asked to recall their earlier decision. Others first got to see the actual cholesterol content of 
each food item and were then asked to recall their earlier answers.      

    Consistent with the model, the researchers found that knowledge of nutrition values was updated such that it was more 
consistent with the feedback (i.e., the actual cholesterol content), whereas this knowledge remained unchanged when 
no feedback was given. Based upon these results, the RAFT model was able to make precise predictions about when 
hindsight bias occurs. In fact, the researchers found that the model's predictions were accurate up to 80 percent of the 
time. Furthermore, when the researchers reminded participants of the cues they originally used to make their decisions, 
the incidence of hindsight bias dropped.     "RAFT is the first process model that is able to predict for an individual item 
of an individual participant whether hindsight bias will occur, disappear or even reverse," states lead author Hoffrage. 
"It is a cheap price we have to pay for a much larger gain: a well functioning memory that is able to forget what we do 
not need, such as outdated knowledge, and constantly updates our knowledge by increasing the accuracy of 
our inferences."     

    Article: "Hindsight Bias: A By-Product of Knowledge Updating?," Ulrich Hoffrage, Ph.D. , Ralph Hertwig, Ph.D., and Gerd 
Gigerenzer, Ph.D., Max Planck Institute for Human Development; Journal of Experimental Psychology: Learning, Memory 
and Cognition, Vol. 26, No. 3APA News Release, May 14, 2000, Contact: APA Public Affairs Office (202) 336-5700. 

Retrieved March 23, 2006 from APA online site: http://www.apa.org/releases/hindsight.html

                 Social Psychology
                      Robert C. Gates