Outcome Bias

What Is Outcome Bias?

Outcome bias emerges when a decision depends on the outcome of previous events, regardless of how the past events developed. Outcome bias doesn't include analysis of factors that lead to a previous event, and on second thought de-underscores the events going before the outcomes and overemphasizes the outcome. Not at all like hindsight bias, outcome bias doesn't include the distortion of past events.

Understanding Outcome Bias

Outcome bias can be more dangerous than hindsight bias in that it just assesses real outcomes. For instance, an investor chooses to invest in real estate subsequent to learning a partner made a big return on an investment in real estate when interest rates were at an alternate level. As opposed to take a gander at different factors that might have brought about the partner's prosperity, for example, the wellbeing of the overall economy or performance of real estate, the investor is zeroing in on the money made by the associate.

Players additionally fall prey to outcome bias. While measurably, casinos end up as a winner undeniably more routinely, numerous speculators utilize recounted "proof" from friends and colleagues to legitimize their played. This outcome bias: that continuing to play could bring about winning a large amount of money prevents the speculator from leaving the casino.

In business settings, an overemphasis on "performance" is progressively making an outcome-driven culture which frequently compounds individuals' feelings of trepidation by making up a zero-sum game in which individuals are either succeeding or losing and "victors" immediately get removed from "washouts."

For instance, few would contend with the noteworthy growth of social media companies. During this growth, just a modest bunch of people forewarned against the methods by which growth was created. After learning personal and private client data was a critical driver of growth, the outcome bias of social media is on full display. In effect, ethical slips are generally disregarded during fruitful outcomes. Be that as it may, terrible outcomes are undeniably bound to create active condemnation.