Hindsight Bias: The Expectation-Based Adjustment Theory

Hindsight bias explains the human inclination to perceive an event’s outcome as the one obvious and inevitable outcome. It starts with an original prediction or forecast of the future that helps us prepare, plan, and set goals for ourselves. These predictions influence our decision making, sending the reminder to our brain that one behavior sparks a desired outcome. So whether we are aware of it or not, every thought, decision, and act we make is based around our preconceived hypotheses on how the world operates. Foresight is a useful survival skill that allows us to use our current knowledge or beliefs to help guide us through the trials and tribulations of life. However, our hypotheses are not always correct. When all is said and done, we

The expectation-based adjustment theory proposes that people use metacognitive information before adjusting their retro speculation, attempting to recall how surprising they found the given outcome compared to their original prediction. This theory suggests if we are not emotionally surprised by an outcome we think: I should have known, which leads to hindsight bias. If we are surprised by the outcome we think: I never would have known, which can either lead to a more accurate or unbiased reconstruction or cause a reconstruction shift away from the given outcome.

When an outcome does not agree with prior expectations and is surprising, we try to make sense of it. We will start accessing the supporting evidence around the outcome, which makes that information more accessible in our memory. We also tend to add extra weight to the supporting evidence if the outcome is surprising, or think of entirely new possibilities of why it occurred. All of this surprise-cued sensemaking and assigning meaning to memories in the past is what reconstructs our new opinions and beliefs and influences future predictive