In this article, we are going to learn about the outcome bias. You’re placing too much value on results and undervaluing the processes behind those results, which means you’ve fallen for a cognitive bias. Or perhaps he has coached some of the top poker players.īasing your decision on each teacher’s outcomes fails to take other critical factors into consideration that could determine who is actually the best teacher. You haven’t watched either player in action to be able to evaluate their decision-making processes and you’ve relied solely on their outcomes, which can be misleading.įor the tournament winner– what were the qualifications for entering each tournament? Was it an official tournament? When you say “cash prize”–is this a few dollars or a few thousand dollars? What was the skill level of the opponents?Īnd for the recreational teacher– what have his students gone on to achieve? Perhaps one of his students was the other prospective teacher. You’ve made an assumption that the better teacher is the one who has publicly demonstrated his positive outcomes.īut what you haven’t done is take the time to understand how those results were achieved. If you’re already picking the championship tournament winner, you’ve just fallen for the outcome bias. They both charge the same for private lessons. You have two options for people that you can hire to be your teacher: one has won seven poker tournaments and earned cash prizes for his winnings, and the other plays recreationally–and while he hasn’t won any tournaments, he makes some extra cash by offering private poker lessons. Analyzing the results of your decisions will help you understand what went right or wrong and help you identify other solutions or opportunities.Let’s say you’re ready to learn a new hobby–and since your buddies seem to enjoy their poker nights, learning how to play this game will allow you to get in on the fun.īut you’ve got some catching up to do when it comes to knowing how to strategize, so you decide to take some lessons to help prepare you to be a competent player. Review your journal entries: A decision journal can help allow for better decision-making in the future, as well as prevent second-guessing.Additionally, weighing all information is essential, including placing more weight on valuable information. This allows you to understand better what you thought would happen when making the decision. These decision journals help detail when and how decisions were made. In large part, such a document will help ensure you can accurately reflect on a situation. Keep a journal or diary: This will create a record of the decision-making process, allowing you to revisit the reasons you came to certain conclusions.Because circumstances change, this can help you in the future if you encounter similar situations. Brainstorm alternative outcomes: Think about other things that might have happened in the situation you're considering.With this, we become less critical of our decisions, leading to poor decision-making in the future. Hindsight bias is caused by: The idea is that once we know the outcome, it’s much easier to construct a plausible explanation. Hindsight bias is when a person looks back at an event and believes they predicted the outcome, even if they failed to act on that "prediction." Unfortunately, this leads people to think that their judgment is better than it is.
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