High-sight bias occurs when people look back on their own judgements and those of others. We are not good at reconstructing and recalling the way an uncertain situation appeared to us before finding out the results of the decision.
We tend to overestimate what we know beforehand based upon what we later learned. Knowledge of an outcome increases belief about the degree to which one would have predicted without the belief of that knowledge.
Assume a manager who works for you hired a new supervisor. You were well aware of her choices and allowed to choose. After couple of months, you received production data on every supervisor and the data for this one is terrible. You call the manager and say: there was plenty of evidence that he was a wrong man for this job!
Knowledge of an event works as an anchor by which individuals interpret their prior judgements of the event’s likelihood. Confirmation information is selectively accessible to us during information retrieval and our adjustments to anchors are inadequate.
High-sight knowledge biases our perceptions of what we remember knowing in foresight. Evidence that is consistent with the known outcome may become cognitively more salient and thus more available in memory.
This tendency leads us to justify claimed foresight in view of “facts provided”. The relevance of a particular piece of data may later be judged important to the extent to which it is representative of the final observed outcome.
In a short-term, it is advantageous. We believe that judgements are better than they actually are. It allows to criticise other people’s apparent lack of foresight. However, this reduces our ability to learn from past experiences and evaluate decisions objectively. Results are affected by a variety of factors outside the direct control and should be processed by logic.
Curse of knowledge
When people assess other’s knowledge, they are unable to ignore knowledge that others do mort have. Sophistication stands in our way of a fair assessment. As a result, we sometimes fail to communicate clearly.
We falsely believe that people understand our ambiguous messages. For instance: communication by email lacks cues of intonation and body language and may make the problem worse.
There are several ways to overcome this. (1) Thinking in terms of differences and (2) diversity in the workplace may reduce the curse of knowledge. Additionally, try to (3) communicate clearly and provide alternative explanations for the relevant events.
Bazerman, M.H. and Moore, D.A., 1994. Judgment in managerial decision making (p. 226). New York: Wiley.