Outcome bias
Encyclopedia
The outcome bias is an error made in evaluating the quality of a decision when the outcome of that decision is already known.
Baron and Hershey (1988) presented subjects with hypothetical situations in order to test this. One such example involved a surgeon deciding whether or not to do a risky surgery on a patient. The surgery had a known probability of success. Subjects were presented with either a good or bad outcome (in this case living or dying), and asked to rate the quality of the surgeon's pre-operation decision. Those presented with bad outcomes rated the decision worse than those who had good outcomes.
The reason why an individual makes this mistake is that he or she will incorporate presently available information when evaluating a past decision. To avoid the influence of outcome bias, one should evaluate a decision by ignoring information collected after the fact and focusing on what the right answer is, or was at the time the decision was made.
Overview
One will often judge a past decision by its ultimate outcome instead of based on the quality of the decision at the time it was made, given what was known at that time. This is an error because no decision maker ever knows whether or not a calculated risk will turn out for the best. The actual outcome of the decision will often be determined by chance, with some risks working out and others not. Individuals whose judgments are influenced by outcome bias are seemingly holding decision makers responsible for events beyond their control.Baron and Hershey (1988) presented subjects with hypothetical situations in order to test this. One such example involved a surgeon deciding whether or not to do a risky surgery on a patient. The surgery had a known probability of success. Subjects were presented with either a good or bad outcome (in this case living or dying), and asked to rate the quality of the surgeon's pre-operation decision. Those presented with bad outcomes rated the decision worse than those who had good outcomes.
The reason why an individual makes this mistake is that he or she will incorporate presently available information when evaluating a past decision. To avoid the influence of outcome bias, one should evaluate a decision by ignoring information collected after the fact and focusing on what the right answer is, or was at the time the decision was made.
See also
- Historian's fallacyHistorian's fallacyThe historian's fallacy is a logical fallacy that occurs when one assumes that decision makers of the past viewed events from the same perspective and having the same information as those subsequently analyzing the decision...
- Deontology vs. teleologyTeleologyA teleology is any philosophical account which holds that final causes exist in nature, meaning that design and purpose analogous to that found in human actions are inherent also in the rest of nature. The word comes from the Greek τέλος, telos; root: τελε-, "end, purpose...
and consequentialismConsequentialismConsequentialism is the class of normative ethical theories holding that the consequences of one's conduct are the ultimate basis for any judgment about the rightness of that conduct...
(ethicalEthicsEthics, also known as moral philosophy, is a branch of philosophy that addresses questions about morality—that is, concepts such as good and evil, right and wrong, virtue and vice, justice and crime, etc.Major branches of ethics include:...
theories) - List of cognitive biases