Of course, we are wiser in hindsight, for we know that we learn from experience. In retrospect, however, we often believe that we already knew how things would turn out. It was obvious,” we like to say when disaster strikes. But when it could have been averted, the clairvoyants were rather silent. Even after the unexpected outcome of a football game, a large proportion of people claim to have long suspected the result. Similarly, the results of an election, no matter how far-fetched, may not come as a surprise to most people. Of course, some people just want to make themselves look important, but many are genuinely convinced that they have accurately predicted the future, even though this is not true. Behind this kind of know-it-all attitude is a well-known psychological phenomenon: hindsight bias.
We all fall into this thinking trap from time to time. There are few psychological traits that can be clearly linked to a greater tendency to make mistakes in hindsight. A lower level of intelligence and the desire to present oneself in a positive light may play a role. However, the scientific evidence is inconclusive. The only trait that seems to have a clear impact on hindsight bias is age: children and the elderly are more likely to fall prey to cognitive bias.
Hindsight bias is not based on conscious, deliberate processes. Even warnings about it or financial incentives cannot prevent it. When confronted with it, people are not even aware that the newly acquired knowledge has distorted their memories. It is therefore a fundamental problem in the processing of information and its storage in memory.
A forecast is always made under conditions of uncertainty. When the result is known, we store the new facts along with everything else we already know. Later, when we want to remember what we originally suspected, we can no longer clearly distinguish the sources of each piece of information. They get mixed up in our minds. And so we use all the available data to reconstruct the original estimate, including the knowledge we acquired later. Hindsight bias has been studied in countless experiments and found to be extremely persistent. So far, there is no known method to reliably avoid it.
But is this a bad thing? This is a form of adaptive learning, which means that we store new and more accurate information as the old, less accurate information fades. So what’s the problem? This is a very powerful cognitive process that has accompanied, if not driven, our evolution. The fact that, in some situations, we may not be able to accurately recall previous statements seems to be a rather minor drawback.