Hindsight bias: how knowledge and heuristics affect our reconstruction of the past.

Once people know the outcome of an event, they tend to overestimate what could have been anticipated in foresight. Although typically considered to be a robust phenomenon, this hindsight bias is subject to moderating circumstances. In their meta-analysis, Christensen-Szalanski and Willham (1991) observed that the more experience people have with the task under consideration, the smaller is the resulting hindsight bias. This observation is one benchmark against which the explanatory power of process models of hindsight bias can be measured. Therefore, we used it to put the recently proposed RAFT model (Hoffrage, Hertwig, & Gigerenzer, 2000) to another test. Our findings were consistent with the "expertise effect." Specifically, we observed-using computer simulations of the RAFT model-that the more comprehensive people's knowledge is in foresight, the smaller is their hindsight bias. In addition, we made two counterintuitive observations: First, the relation between foresight knowledge and hindsight bias appears to be independent of how knowledge is processed. Second, even if foresight knowledge is false, it can reduce hindsight bias. We conclude with a discussion of the functional value of hindsight bias.