Hindsight Bias or the “I-knew-it-all-along” Effect


Hindsight bias is a cognitive bias in which individuals tend to see events that have already occurred as being more easily predicted than they would have been before taking place (1). For example, after the close of the stock market, individuals displaying hindsight bias may state that they “knew all along” that a particular stock would go up or down for the day.
Hindsight bias was first studied experimentally by Beyth and Fischhoff, who asked people to judge the likelihood of several outcomes of president Richard Nixon visiting China and Russia. After Nixon’s return to the United States, participants were asked to recall the probabilities they had assigned to each possible outcome. Beyth and Fischhoff observed that participants’ perceptions of the likelihood of each outcome happening were greater for the events that had actually occurred (2).

Sources:

(1) Hoffrage, U., & Pohl, R. (2003). Hindsight Bias: A Special Issue of Memory. Champlain, NY: Psychology Press

(2) Fischhoff, B., and Beyth, R. (1975). “I knew it would happen: Remembered probabilities of once-future things”. Organizational Behaviour and Human Performance. 13, 1-16