The stock market, 9/11, space shuttle disaster, and Penn State.

Hindsight bias, or the tendency to subjectively distort the past with the lens of present knowledge, has a constant effect on human cognition, particular with regard to aspects of moral judgment. Symptoms of the hindsight bias are tell-tale emotive disbelief that rings of “How could they have let this happen? This could have been prevented so easily.” When looking back with our knowledge of what actually resulted, we tend to make the following errors.

  • We believe that, given the same circumstances as a one who made a critical decision in the chain of cause and effect, we would have made the “right” decision. (Either morally or logically superior.) This is not a shallow, I don’t want to think too much about it because I’d quickly realize I wouldn’t make that decision belief; it is a deep-felt belief that we would do the right thing.
  • We suspect that an individual who made a pivotal decision was acting in a nefarious and self-centered manner OR was incredibly intellectually lazy. Our omniscient perspective tells us that although the actor may not have known the outcome that occurred, he should have ascribed a much higher probability to such an outcome.
  • We tend to completely filter out the complexity of factors that often affect a particular decision. These factors frequently move us to make horrible choices that don’t have catastrophic consequences; thus, they may often never draw scrutiny. This intricate web of forces that feed the ego, or establish position in the social hierarchy, or a host of other possibilities, disappear when a failure occurs.

I’ve presented these with respect to negative consequences; however, the same bias can play the other direction with positive consequences. In this case, a decision gets more credit than it deserves due to the ultimate impact. We often ascribe heroics to what was essentially dumb luck or make a selfless champion of one who was acting only for personal gain. Nonetheless, negative hindsight bias seems to me more readily observable. The best way to understand the true cognitive effect of hindsight bias is to look at the stock market. When you look at the oscillation of the historical data of a particular stock, for example, one thing that often strikes us as obvious from the data alone is that except for an occasional stray event (like a sudden crash) the behavior of the stock appears as if it should be reasonably predictable. But, outside of employing elements of chaos theory and complexity analysis, the behavior is not even close to as predictable as it seems. For instance, if you look at the following stock.

As you follow it along, you can almost feel your mind use all the data to project a reliable patter.  At point ‘A’ for example, we might thing it appears quite obvious that it’s time to sell and at point ‘B’ to buy. We might believe that this stock game should be quite easy if you pay attention; however, when we jump to the end of the data we find that clarity we might expect to see completely disappear once the data stops. If you trace the graph along and reach the end, then boom–you get this strange cognitive dissonance where the uncertainty suddenly becomes more clear. (Think it seems clear? Hey…it took a dive in May 2010…did you do make the right call?)

Cognitive bias plays much more grotesque games than mere distortions of our ability to objectively look back at the past. Some cognitive scientists, such as Tversky and Kahneman, discovered through experiment (which is much more significant than discovery through meditation and reflection or discovering through prayer) that the hindsight bias can actually influence our memory. This helps explain our intense moral condemnation toward someone who pulls a boner which ends in catastrophe.

In the psychology test, subjects were asked to rate the expected results of an upcoming event  Then much later after the results of the event unfolded, the subjects were interviewed again and asked about how well they remembered rating their initial probabilities of the various possibilities. Their answers were significantly skewed toward an increase in probability of those effects which actually occurred. That is, they remembered being more confident about the actual results than they actually were prior to the events unfolding.

As you might imagine, the hindsight bias can cause many more problems than simply the annoying confidence of Monday morning’s armchair quarterbacks about the failures of this or that coaching decision. In courts, witnesses who benefit from hindsight, suffer from biases that are capable of influencing actual memories and juries who benefit from hindsight often find it impossible to empathize with defendants when they truly believe they would have found it quite easy to take the right action.

One of the most interesting demonstrations of this effect is captured if we think about the 9/11 terrorist attacks. Watching documentaries about the buracratic road-blocks and individual failures to act on known intelligence, the common reaction has been to condemn those who failed to act appropriately and point a finger of accountability at the failure to deal with information that was in our hands. The hindsight bias, though, makes it very difficult for us to truly understand those decision points. We don’t see all those times where intelligence was ignored and nothing became of it, and we also don’t see those times when agents acted on intelligence that turned out to be inaccurate. When much ado is made about nothing, individuals must answer for that as well; even though the resulting ridicule doesn’t impinge into the public sphere, its cognitive effects certainly cannot be ignored. If you’ve ever watched one of these documentaries that covers the abject breakdown of acting on 9/11 intelligence, you probably reacted (quite naturally) with emotions that cried out, “Those idiots! Those fools! This could have all been prevented if you had done your jobs!” This is the hindsight bias at play.

As a further example, we all know the impact of the false intelligence around weapons of mass destruction. Much of the criticism toward the resulting invasion of Iraq hinges on our hindsight that this intelligence was largely bunk. Knowing the consequences, countless Americans misremember the level of their enthusiasm around this invasion. It usually does not breach into truly believing they opposed the war, when they were for it; however, the majority of Americans greatly attenuate the level of support for the war, remembering doubts and second thoughts that simply weren’t there. Even politicians with recorded comments and voting records later remember far less enthusiasm. But indulge me with this thought experiment for a moment, if you will. Imagine if we had not acted on WMD intelligence. Suppose the intelligence was acknowledged, but officials decided the level of certainty in that intelligence was not enough to justify an invasion. After a few years of continued tension, suppose Iraq then employed the use of WMD against us (in a terrorist fashion) or against Israel in a military fashion. How would we feel then about intelligence we had failed to act on?

My point, of course, is not to ignore costly mistakes. But when we fail to realistically consider the impact of the modes of human cognition and simply look judge and condemn, and employ an over-damped response to a particular failure, we should not be surprised when we end up spending billions to implement largely vacuous security measures (i.e. “Did you pack your own suitcase;”  “Luggage may not be left unattended…” etc.)  Most thinking individuals realize that after 9/11, we were much safer in the skies without doing anything at all. Once people understood the intent of the terrorists, it was no longer possible to hijack an airplane with box-cutter knives. The natural correction happened via cell phone aboard a plane that crashed in a field near Shanksville Pennsylvania. In a sense, in this tragedy, we can see how hindsight bias operates. With the stereo-typical mode of hijacking, of course, the hijackers want something so the projection ends with a bunch of terrorists sitting on a runway screaming stuff until the SWAT team moves. Expected casualties < 10%.  This leaves individuals to believe the best possible course of action is inaction. Let the authorities handle it. The moment the trajectory is changed and knowledge of suicide missions into the World Trade Center and the Pentagon reached United Flight 93 passengers, the decision matrix swiftly changed. Suddenly action became the obvious choice. I submit that it wasn’t the particular breed of heroes aboard Flight 93 that led to their attempt to overtake the hijackers, but rather their newfound knowledge of where inaction would lead them (almost certain death.)

This does not mean that we don’t need to make any changes to our security protocols, of course, but only that we should understand that many of the changes that we are inclined to make (“to prevent this from ever happening again”) are highly unnecessary and ineffective with regard to that goal. In other words, such changes are often an incredible waste of money. It sometimes seems odd to me that with our hindsight bias, we often readily submit ourselves to such wasteful measures – yes, spend more government money to ensure our safety – while simultaneously we loathe the idea of using the government to make sure sick people (who cannot afford health care) are cared for. But that’s a topic for another day.  My point is not that we should avoid responding, but that we must learn to account for this problematic bias that plagues our judgment of past events.

The final example, of course, is the tragic episode at Penn State. This, of course, must be handled with kid gloves…(okay, maybe the wrong idiom to use here, but anything you say can erupt violently against you at this point…just ask Ashton Kutcher!) Much of what I’ve seen by the media called for the immediate removal of Joe Paterno (with the exception of a faction of Penn State Fans) and anyone who had an inkling of what might had gone on that horrible night. Never have I witnessed so many accusations of cowardice and failure to do the right thing. I think, of course, we are all agreed that the right thing would have been something other than the inaction that in fact occurred. Where I think the bias affects us, however, is in that feeling of certainty most of us have that we would have done what was right. Some, surely, would have done the right thing, but I would suggest that among many who scream “Coward!” the loudest, there are those who would have done no more (and perhaps less) than Paterno himself. Of course, we all have the hindsight profile of a serial pedophile who was abusing not one, but many kids. It is easy to judge now that the legendary coach was morally obligated to further action after nothing seemed to result from his reporting the incident (that he did not witness, but was reported to him by a reliable witness.) But imagine for a moment a very close acquaintance, friend and coworker for more than twenty years, who you have no indication is capable of child rape, is suddenly accused of child rape. It is much easier for an observer who doesn’t really know any of these actors to stand back and say, “Hey what about the 10-year-old who was raped?” The Bayesian model the brain tends to utilize (this is what makes it hard for one to give up on a theory such as Creationism in spite of clear evidence against it) explains why it is nowhere near as easy for someone whose representation of the accused is completely inconsistent with the action of the accused. If it has ever happened to you, then you know that not only is it hard to believe, but you do not want to believe it. How can someone you respect be capable of such a heinous thing. The obligatory act of passing the report on is hard enough – I guarantee you will not want to think about it. When nothing becomes of passing it up the chain, is the right thing to do something further? Yes, of course. But if you suppose the decency and character of an individual is fully defined by whether or not they do manage to escalate it…well, you are naive, and have no appreciation for the intricate complexity of the human brain. The expectation of one who has the clout and influence of a Joe Paterno, however, is clear. You must. It comes with the territory.

You know what they say about hindsight…

One may hope, however, that the hindsight bias serves us in our future judgments, yet it’s often tricky to match the pattern when instead of reflecting on what has happened, we are sitting in the present, and we are staring into an uncertain void of possibilities. I wish you the best in making the right choice – it’s not as easy as will look once you observe its effects.


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