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This is why it’s important to add objectivity to your ideas and properly set up campaigns. However, I have not considered the subject line, call to action and a variety of other factors that may have contributed to the increased CTR. If the CTR increases for the newsletter with the image in it, I may automatically assume that the campaign was successful because of the image. This is why it’s best to establish guidelines on what is successful and what is not.įor example, say I set up an experiment to see if including an image in my email newsletter increases click through rates. Then, as you look back on the results, you’ll use hindsight bias to justify why things happened the way that they did. It’s thinking that past events are more predictable than they really are. It’s sometimes even labeled the I-knew-it-all-along effect.
Examples of hindsight bias series#
On the evening of an important World Series game, your friend predicts that the Red Sox are going to win by a large margin. Another way is to be aware of the unpredictability of. Here are some examples of the hindsight bias phenomenon. Afterwards, we can find a lot of reasons why we should have waited longer before buying or selling a particular security. So if you made a significant career decision, you can look back, see your predictions about how things will turn out, and judge if it was the right decision. When it comes to the field of investing, most investors will have experienced trades that performed badly. Inconclusive Experiments: If marketing experiments are not set up properly, it’s easy to identify something as a “win”, fudge numbers, or simply be left with inconclusive data. Hindsight bias is when we look back and say, I knew this was going to happen even though we didn’t know. One way to avoid Hindsight Bias is to keep track of your decisions and reasoning at that time. This is exactly what happened to JC Penney’s revenue in 2012. Now when you try to take discounts away, your revenue may drop dramatically.
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For example, you may condition customers to expect discounts, meaning that they will only spend money when there is a sale. This may be the case, but there are also adverse effects. In fact, you want them to be at the point that they they are telling their friends, “I knew this would be the best company to buy X from.”ĭiscounting: Businesses may assume that discounts increase revenue. These customers are genuinely happy that they bought your product as they feel that the value they receive was worth more than the price they paid. Have you ever said, I knew it all along after something happened These are examples of the hindsight bias which is the tendency to believe, once the outcome. Honest Marketing: When marketing to customers, you need them to hit a point where they select your product or service and are later so satisfied that they congratulate themselves. Hindsight bias happens when someone sees an event as predictable and happens as they guessed it would, even if they have little to no objective reason for making that prediction. Also Known As: The "knew-it-all-along" effect, or creeping determinism.