abilene-paradox

What Is The Abilene paradox? The Abilene Paradox In A Nutshell

Business / By / October 19, 2023

The Abilene paradox was first introduced by management expert Jerry B. Harvey in a 1974 article entitled The Abilene Paradox: The Management of Agreement. The Abilene paradox occurs when a group of people collectively decide to act in a way that contradicts the preferences of most or all the individuals in the group.

AspectExplanation
Concept OverviewThe Abilene Paradox is a psychological phenomenon that occurs within groups or organizations when members collectively agree on a course of action that none of them individually desires. It’s characterized by a group’s tendency to conform to what they believe to be the perceived wishes or expectations of the group, even when those actions go against their personal preferences. The term was coined by management expert Jerry B. Harvey in the 1970s.
Key ElementsThe Abilene Paradox involves several key elements:
– Miscommunication: Typically, the paradox starts with a miscommunication or misunderstanding within the group.
– Desire to Avoid Conflict: Members often choose to go along with the group’s decision to avoid conflict or to be seen as agreeable.
– Collective Assumption: Members make a collective assumption that everyone else in the group agrees with a particular course of action.
– Individual Dissatisfaction: Despite outward agreement, individuals within the group may harbor feelings of dissatisfaction or discomfort with the decision.
CausesSeveral factors can contribute to the Abilene Paradox:
– Lack of Communication: Inadequate communication within the group can lead to misunderstandings about individual preferences and desires.
– Desire for Harmony: A strong desire for harmony and avoidance of conflict can drive individuals to conform to perceived group consensus.
– Groupthink: Groupthink is a psychological phenomenon where the desire for unanimity overrides critical thinking and independent decision-making.
– Fear of Reprisal: Members may fear backlash or negative consequences if they voice their dissenting opinions.
– Assumption of Unanimity: Assumptions that everyone agrees can lead to the paradox, even when it’s not the case.
ConsequencesThe Abilene Paradox can have several negative consequences within organizations:
– Inefficient Decision-Making: Group decisions made under the paradox are often suboptimal and can lead to inefficiency.
– Wasted Resources: Resources may be misallocated on initiatives that lack individual commitment or enthusiasm.
– Low Morale: Members may become frustrated or resentful, leading to low morale and reduced productivity.
– Stifled Innovation: The fear of dissent can stifle innovation and creative problem-solving.
– Reinforcement of Groupthink: The paradox can reinforce a culture of groupthink, where critical thinking is discouraged.
Prevention and MitigationPreventing or mitigating the Abilene Paradox requires proactive steps:
– Open Communication: Encourage open and honest communication within the group, where individuals feel safe expressing their opinions.
– Diversity of Thought: Promote diversity of thought and encourage different perspectives during decision-making.
– Conflict Resolution: Develop conflict resolution mechanisms to address disagreements constructively.
– Individual Responsibility: Encourage individual responsibility for decision-making and avoid deferring decisions to the group.
– Awareness: Raise awareness within the organization about the Abilene Paradox and its potential impact.
ExamplesExamples of the Abilene Paradox can be found in various settings, such as family decisions, corporate boardrooms, and government policymaking. In a corporate context, it might manifest as a team agreeing to a project that none of them truly believes in because they assume it’s what the higher-ups want, while in reality, everyone has reservations.

Understanding the Abilene paradox

In the article, Harvey recounted the parable which gave the paradox its name. On a hot today in Coleman, Texas, a husband, wife, and her parents were sitting on the porch quite comfortably sipping lemonade. The father-in-law suggest driving 53 miles to Abilene to eat at a cafeteria, a suggestion the other three decided to go along with despite feeling apprehensive. 

The travel to Abilene in a car without air conditioning was unpleasant, and the meal at the cafeteria wasn’t particularly appetizing either. On their way back to Coleman, the members of the group complained about the decision to go to Abilene. Despite their initial opposition, the individuals went along with the idea because they didn’t want to upset anyone. 

Why does the Abilene paradox occur?

The Abilene paradox occurs because of a fundamental inability to manage agreement. Each member mistakenly believes their preferences differ from the rest of the group and as a consequence, does not raise any objections. This is a major problem in organizations that have become so adept at managing conflict that the skill of managing agreement is underdeveloped or absent.

Favoring agreement over speaking up can be explained by various aspects of social psychology, including theories relating to social conformity and social influence. These theories suggest individuals are extremely averse to acting in a way that contravenes the prevailing actions of a group.

Individual aversiveness, in turn, might be explained by what Harvey called “negative fantasies”. Here, the individual experiences unpleasant visualizations detailing how the group may act if they are honest with their thoughts or feelings. In situations with a palpable or realistic chance of the group excluding them entirely, the individual may pre-emptively experience separation anxiety.

Symptoms of the Abilene paradox in an organizational context

Failing to manage agreement may not seem like such a bad thing at first glance, but it can have serious implications for a company.

Following is a look at the six symptoms of the paradox as described by Harvey himself:

  • Employees agree as to the nature of a problem or situation facing the organization. However, they agree privately without informing others.
  • Employees also agree as to the steps required to rectify the problem or situation. In the Abilene parable, maintaining the status quo by remaining on the porch sipping lemonade would have satisfied individual and group needs. This agreement is also made privately.
  • Private agreement causes employees to fail to communicate their desires and beliefs to one another. This causes every other member of the group to misperceive the collective reality. 
  • This misperception then causes each individual to act contrary to their desires with inaccurate and invalid information. In a business context, employees act in ways that are counterproductive to organizational purpose, intent, and success.
  • Counterproductive actions then causes employee frustration and anger as employees become dissatisfied with the organization. They tend to form subgroups with trusted acquaintances and direct their grievances toward other subgroups and authority figures.
  • If the ability to manage agreement is absent, the cycle repeats itself with greater intensity. In the Abilene parable, the group became conscious of the paradox, thereby ensuring their problems did not intensify.

Avoiding the Abilene paradox

Here are three ways to avoid the negative impacts of the paradox in any organization:

  • Create a safe environment – if the individual is reluctant to share an opposing view, then they must be encouraged by creating an environment where it is safe to do so. Specifically, there should be a culture of trust, collaboration, and empathy with team leaders setting the example.
  • Actively listen to feedback – opinions that go against the grain must be actively considered by leadership. This helps diffuse potential conflict before it has the chance to undermine the organization. It also helps avoid a situation where employees become cynical about their chances of being heard or instituting change. Diversity of input and opinion is key, no matter how unpopular or unconventional.
  • Expect disagreement – it is important to consider disagreement as a healthy by-product of teams with diverse perspectives. In collaborative organizations, disagreement is analyzed to enrich and validate the final decision.

Examples of the Abilene Paradox in Organizations

  • Boardroom Decision-Making: During a board meeting, members may privately disagree with a proposed strategy but refrain from voicing their concerns to avoid conflict. As a result, the group may collectively agree on a decision that contradicts the preferences of most board members.
  • Team Project Planning: In a team setting, members may individually prefer a different approach to a project, but they choose not to share their ideas to maintain harmony. As a result, the team may end up following a less effective strategy, leading to suboptimal outcomes.
  • Corporate Culture: In a company with a hierarchical culture, employees may withhold their honest feedback and conform to superiors’ opinions to avoid potential repercussions. This lack of open communication can hinder innovation and problem-solving.
  • Organizational Change: When a company is undergoing a significant change, employees may privately oppose the change but go along with it to align with the management’s direction. This lack of open dissent can lead to decreased morale and resistance to change.
  • Marketing Campaigns: In a marketing team, members may have reservations about a specific campaign idea but decide not to express their concerns. As a result, the team may launch a campaign that fails to resonate with the target audience, leading to wasted resources.
  • Product Development: During product development discussions, team members may harbor doubts about certain features, but they choose not to raise objections to avoid disrupting the group’s consensus. This can lead to the release of a product with subpar functionalities.
  • Strategic Planning: In strategic planning sessions, executives may have different visions for the company’s future, but they keep their opinions to themselves to avoid conflicts at the top level. This lack of open debate can result in a lack of clarity in the company’s direction.
  • Project Prioritization: When allocating resources to various projects, team members may secretly disagree with prioritization decisions but fail to voice their concerns. This may lead to the allocation of resources to projects that do not align with the company’s long-term goals.
  • Team Performance Evaluation: In a performance review meeting, team members may have differing opinions about a colleague’s contributions but avoid discussing their concerns openly. This can result in biased evaluations and hinder individual and team growth.
  • Corporate Mergers and Acquisitions: During merger negotiations, executives from both companies may have reservations about certain terms, but they refrain from expressing them to facilitate the deal. This can lead to unanticipated challenges and integration issues after the merger.

Key takeaways:

  • The Abilene paradox occurs when a group of people collectively decide to act in a way that contradicts the preferences of most or all the individuals in the group.
  • The Abilene paradox occurs because of a fundamental inability to manage agreement. Each member mistakenly believes their preferences differ from the rest of the group and as a consequence, is fearful of voicing their concerns. This inability to raise objections is rooted in aspects of social influence and social conformity theory.
  • Avoiding the Abilene paradox in organizations means creating a safe environment, actively listening to feedback, and reframing disagreement as a function of healthy and diverse teams.

Key Highlights

  • Definition: The Abilene paradox refers to a situation in which a group collectively decides to act in a way that contradicts the preferences of its individual members. It was introduced by Jerry B. Harvey in a 1974 article.
  • Origin: Harvey shared a parable of a family trip to Abilene, where individuals went along with a decision they didn’t prefer due to the assumption that others favored it.
  • Why the Paradox Occurs:
    • Individuals mistakenly believe their preferences are different from the group’s.
    • Fear of conflict and social influence theories lead to reluctance in expressing dissenting views.
    • “Negative fantasies” generate anxiety about potential reactions to disagreement.
  • Symptoms of the Paradox (as described by Harvey):
    • Private agreement on problems and solutions without open communication.
    • Failure to share desires and beliefs leads to misperception.
    • Individuals act against their preferences due to inaccurate information.
    • Counterproductive actions cause frustration and subgroups within the organization.
    • A cycle repeats with greater intensity when agreement management is absent.
  • Avoiding the Paradox:
    • Create a safe environment that encourages open expression.
    • Actively listen to diverse feedback, even if it contradicts prevailing views.
    • Embrace disagreement as a natural part of diverse teams.
  • Examples in Organizations:
    • Boardroom decisions that disregard individual concerns.
    • Team projects following less effective strategies due to lack of open communication.
    • Corporate cultures inhibiting honest feedback and innovation.
    • Organizational changes met with resistance due to lack of dissent.
    • Marketing campaigns failing to resonate due to unexpressed doubts.
    • Product development leading to subpar functionalities.
    • Strategic planning without open debate, leading to unclear direction.
    • Biased performance evaluations due to suppressed opinions.
    • Mergers facing integration challenges due to unspoken reservations.

Connected Thinking Frameworks

Convergent vs. Divergent Thinking

convergent-vs-divergent-thinking
Convergent thinking occurs when the solution to a problem can be found by applying established rules and logical reasoning. Whereas divergent thinking is an unstructured problem-solving method where participants are encouraged to develop many innovative ideas or solutions to a given problem. Where convergent thinking might work for larger, mature organizations where divergent thinking is more suited for startups and innovative companies.

Critical Thinking

critical-thinking
Critical thinking involves analyzing observations, facts, evidence, and arguments to form a judgment about what someone reads, hears, says, or writes.

Biases

biases
The concept of cognitive biases was introduced and popularized by the work of Amos Tversky and Daniel Kahneman in 1972. Biases are seen as systematic errors and flaws that make humans deviate from the standards of rationality, thus making us inept at making good decisions under uncertainty.

Second-Order Thinking

second-order-thinking
Second-order thinking is a means of assessing the implications of our decisions by considering future consequences. Second-order thinking is a mental model that considers all future possibilities. It encourages individuals to think outside of the box so that they can prepare for every and eventuality. It also discourages the tendency for individuals to default to the most obvious choice.

Lateral Thinking

lateral-thinking
Lateral thinking is a business strategy that involves approaching a problem from a different direction. The strategy attempts to remove traditionally formulaic and routine approaches to problem-solving by advocating creative thinking, therefore finding unconventional ways to solve a known problem. This sort of non-linear approach to problem-solving, can at times, create a big impact.

Bounded Rationality

bounded-rationality
Bounded rationality is a concept attributed to Herbert Simon, an economist and political scientist interested in decision-making and how we make decisions in the real world. In fact, he believed that rather than optimizing (which was the mainstream view in the past decades) humans follow what he called satisficing.

Dunning-Kruger Effect

dunning-kruger-effect
The Dunning-Kruger effect describes a cognitive bias where people with low ability in a task overestimate their ability to perform that task well. Consumers or businesses that do not possess the requisite knowledge make bad decisions. What’s more, knowledge gaps prevent the person or business from seeing their mistakes.

Occam’s Razor

occams-razor
Occam’s Razor states that one should not increase (beyond reason) the number of entities required to explain anything. All things being equal, the simplest solution is often the best one. The principle is attributed to 14th-century English theologian William of Ockham.

Lindy Effect

lindy-effect
The Lindy Effect is a theory about the ageing of non-perishable things, like technology or ideas. Popularized by author Nicholas Nassim Taleb, the Lindy Effect states that non-perishable things like technology age – linearly – in reverse. Therefore, the older an idea or a technology, the same will be its life expectancy.

Antifragility

antifragility
Antifragility was first coined as a term by author, and options trader Nassim Nicholas Taleb. Antifragility is a characteristic of systems that thrive as a result of stressors, volatility, and randomness. Therefore, Antifragile is the opposite of fragile. Where a fragile thing breaks up to volatility; a robust thing resists volatility. An antifragile thing gets stronger from volatility (provided the level of stressors and randomness doesn’t pass a certain threshold).

Ergodicity

ergodicity
Ergodicity is one of the most important concepts in statistics. Ergodicity is a mathematical concept suggesting that a point of a moving system will eventually visit all parts of the space the system moves in. On the opposite side, non-ergodic means that a system doesn’t visit all the possible parts, as there are absorbing barriers

Systems Thinking

systems-thinking
Systems thinking is a holistic means of investigating the factors and interactions that could contribute to a potential outcome. It is about thinking non-linearly, and understanding the second-order consequences of actions and input into the system.

Vertical Thinking

vertical-thinking
Vertical thinking, on the other hand, is a problem-solving approach that favors a selective, analytical, structured, and sequential mindset. The focus of vertical thinking is to arrive at a reasoned, defined solution.

Metaphorical Thinking

metaphorical-thinking
Metaphorical thinking describes a mental process in which comparisons are made between qualities of objects usually considered to be separate classifications.  Metaphorical thinking is a mental process connecting two different universes of meaning and is the result of the mind looking for similarities.

Maslow’s Hammer

einstellung-effect
Maslow’s Hammer, otherwise known as the law of the instrument or the Einstellung effect, is a cognitive bias causing an over-reliance on a familiar tool. This can be expressed as the tendency to overuse a known tool (perhaps a hammer) to solve issues that might require a different tool. This problem is persistent in the business world where perhaps known tools or frameworks might be used in the wrong context (like business plans used as planning tools instead of only investors’ pitches).

Peter Principle

peter-principle
The Peter Principle was first described by Canadian sociologist Lawrence J. Peter in his 1969 book The Peter Principle. The Peter Principle states that people are continually promoted within an organization until they reach their level of incompetence.

Straw Man Fallacy

straw-man-fallacy
The straw man fallacy describes an argument that misrepresents an opponent’s stance to make rebuttal more convenient. The straw man fallacy is a type of informal logical fallacy, defined as a flaw in the structure of an argument that renders it invalid.

Google Effect

google-effect
The Google effect is a tendency for individuals to forget information that is readily available through search engines. During the Google effect – sometimes called digital amnesia – individuals have an excessive reliance on digital information as a form of memory recall.

Streisand Effect

streisand-effect
The Streisand Effect is a paradoxical phenomenon where the act of suppressing information to reduce visibility causes it to become more visible. In 2003, Streisand attempted to suppress aerial photographs of her Californian home by suing photographer Kenneth Adelman for an invasion of privacy. Adelman, who Streisand assumed was paparazzi, was instead taking photographs to document and study coastal erosion. In her quest for more privacy, Streisand’s efforts had the opposite effect.

Compromise Effect

compromise-effect
Single-attribute choices – such as choosing the apartment with the lowest rent – are relatively simple. However, most of the decisions consumers make are based on multiple attributes which complicate the decision-making process. The compromise effect states that a consumer is more likely to choose the middle option of a set of products over more extreme options.

Butterfly Effect

butterfly-effect
In business, the butterfly effect describes the phenomenon where the simplest actions yield the largest rewards. The butterfly effect was coined by meteorologist Edward Lorenz in 1960 and as a result, it is most often associated with weather in pop culture. Lorenz noted that the small action of a butterfly fluttering its wings had the potential to cause progressively larger actions resulting in a typhoon.

IKEA Effect

ikea-effect
The IKEA effect is a cognitive bias that describes consumers’ tendency to value something more if they have made it themselves. That is why brands often use the IKEA effect to have customizations for final products, as they help the consumer relate to it more and therefore appending to it more value.

Ringelmann Effect 

Ringelmann Effect
The Ringelmann effect describes the tendency for individuals within a group to become less productive as the group size increases.

The Overview Effect

overview-effect
The overview effect is a cognitive shift reported by some astronauts when they look back at the Earth from space. The shift occurs because of the impressive visual spectacle of the Earth and tends to be characterized by a state of awe and increased self-transcendence.

House Money Effect

house-money-effect
The house money effect was first described by researchers Richard Thaler and Eric Johnson in a 1990 study entitled Gambling with the House Money and Trying to Break Even: The Effects of Prior Outcomes on Risky Choice. The house money effect is a cognitive bias where investors take higher risks on reinvested capital than they would on an initial investment.

Heuristic

heuristic
As highlighted by German psychologist Gerd Gigerenzer in the paper “Heuristic Decision Making,” the term heuristic is of Greek origin, meaning “serving to find out or discover.” More precisely, a heuristic is a fast and accurate way to make decisions in the real world, which is driven by uncertainty.

Recognition Heuristic

recognition-heuristic
The recognition heuristic is a psychological model of judgment and decision making. It is part of a suite of simple and economical heuristics proposed by psychologists Daniel Goldstein and Gerd Gigerenzer. The recognition heuristic argues that inferences are made about an object based on whether it is recognized or not.

Representativeness Heuristic

representativeness-heuristic
The representativeness heuristic was first described by psychologists Daniel Kahneman and Amos Tversky. The representativeness heuristic judges the probability of an event according to the degree to which that event resembles a broader class. When queried, most will choose the first option because the description of John matches the stereotype we may hold for an archaeologist.

Take-The-Best Heuristic

take-the-best-heuristic
The take-the-best heuristic is a decision-making shortcut that helps an individual choose between several alternatives. The take-the-best (TTB) heuristic decides between two or more alternatives based on a single good attribute, otherwise known as a cue. In the process, less desirable attributes are ignored.

Bundling Bias

bundling-bias
The bundling bias is a cognitive bias in e-commerce where a consumer tends not to use all of the products bought as a group, or bundle. Bundling occurs when individual products or services are sold together as a bundle. Common examples are tickets and experiences. The bundling bias dictates that consumers are less likely to use each item in the bundle. This means that the value of the bundle and indeed the value of each item in the bundle is decreased.

Barnum Effect

barnum-effect
The Barnum Effect is a cognitive bias where individuals believe that generic information – which applies to most people – is specifically tailored for themselves.

Anchoring Effect

anchoring-effect
The anchoring effect describes the human tendency to rely on an initial piece of information (the “anchor”) to make subsequent judgments or decisions. Price anchoring, then, is the process of establishing a price point that customers can reference when making a buying decision.

Decoy Effect

decoy-effect
The decoy effect is a psychological phenomenon where inferior – or decoy – options influence consumer preferences. Businesses use the decoy effect to nudge potential customers toward the desired target product. The decoy effect is staged by placing a competitor product and a decoy product, which is primarily used to nudge the customer toward the target product.

Commitment Bias

commitment-bias
Commitment bias describes the tendency of an individual to remain committed to past behaviors – even if they result in undesirable outcomes. The bias is particularly pronounced when such behaviors are performed publicly. Commitment bias is also known as escalation of commitment.

First-Principles Thinking

first-principles-thinking
First-principles thinking – sometimes called reasoning from first principles – is used to reverse-engineer complex problems and encourage creativity. It involves breaking down problems into basic elements and reassembling them from the ground up. Elon Musk is among the strongest proponents of this way of thinking.

Ladder Of Inference

ladder-of-inference
The ladder of inference is a conscious or subconscious thinking process where an individual moves from a fact to a decision or action. The ladder of inference was created by academic Chris Argyris to illustrate how people form and then use mental models to make decisions.

Goodhart’s Law

goodharts-law
Goodhart’s Law is named after British monetary policy theorist and economist Charles Goodhart. Speaking at a conference in Sydney in 1975, Goodhart said that “any observed statistical regularity will tend to collapse once pressure is placed upon it for control purposes.” Goodhart’s Law states that when a measure becomes a target, it ceases to be a good measure.

Six Thinking Hats Model

six-thinking-hats-model
The Six Thinking Hats model was created by psychologist Edward de Bono in 1986, who noted that personality type was a key driver of how people approached problem-solving. For example, optimists view situations differently from pessimists. Analytical individuals may generate ideas that a more emotional person would not, and vice versa.

Mandela Effect

mandela-effect
The Mandela effect is a phenomenon where a large group of people remembers an event differently from how it occurred. The Mandela effect was first described in relation to Fiona Broome, who believed that former South African President Nelson Mandela died in prison during the 1980s. While Mandela was released from prison in 1990 and died 23 years later, Broome remembered news coverage of his death in prison and even a speech from his widow. Of course, neither event occurred in reality. But Broome was later to discover that she was not the only one with the same recollection of events.

Crowding-Out Effect

crowding-out-effect
The crowding-out effect occurs when public sector spending reduces spending in the private sector.

Bandwagon Effect

bandwagon-effect
The bandwagon effect tells us that the more a belief or idea has been adopted by more people within a group, the more the individual adoption of that idea might increase within the same group. This is the psychological effect that leads to herd mentality. What in marketing can be associated with social proof.

Moore’s Law

moores-law
Moore’s law states that the number of transistors on a microchip doubles approximately every two years. This observation was made by Intel co-founder Gordon Moore in 1965 and it become a guiding principle for the semiconductor industry and has had far-reaching implications for technology as a whole.

Disruptive Innovation

disruptive-innovation
Disruptive innovation as a term was first described by Clayton M. Christensen, an American academic and business consultant whom The Economist called “the most influential management thinker of his time.” Disruptive innovation describes the process by which a product or service takes hold at the bottom of a market and eventually displaces established competitors, products, firms, or alliances.

Value Migration

value-migration
Value migration was first described by author Adrian Slywotzky in his 1996 book Value Migration – How to Think Several Moves Ahead of the Competition. Value migration is the transferal of value-creating forces from outdated business models to something better able to satisfy consumer demands.

Bye-Now Effect

bye-now-effect
The bye-now effect describes the tendency for consumers to think of the word “buy” when they read the word “bye”. In a study that tracked diners at a name-your-own-price restaurant, each diner was asked to read one of two phrases before ordering their meal. The first phrase, “so long”, resulted in diners paying an average of $32 per meal. But when diners recited the phrase “bye bye” before ordering, the average price per meal rose to $45.

Groupthink

groupthink
Groupthink occurs when well-intentioned individuals make non-optimal or irrational decisions based on a belief that dissent is impossible or on a motivation to conform. Groupthink occurs when members of a group reach a consensus without critical reasoning or evaluation of the alternatives and their consequences.

Stereotyping

stereotyping
A stereotype is a fixed and over-generalized belief about a particular group or class of people. These beliefs are based on the false assumption that certain characteristics are common to every individual residing in that group. Many stereotypes have a long and sometimes controversial history and are a direct consequence of various political, social, or economic events. Stereotyping is the process of making assumptions about a person or group of people based on various attributes, including gender, race, religion, or physical traits.

Murphy’s Law

murphys-law
Murphy’s Law states that if anything can go wrong, it will go wrong. Murphy’s Law was named after aerospace engineer Edward A. Murphy. During his time working at Edwards Air Force Base in 1949, Murphy cursed a technician who had improperly wired an electrical component and said, “If there is any way to do it wrong, he’ll find it.”

Law of Unintended Consequences

law-of-unintended-consequences
The law of unintended consequences was first mentioned by British philosopher John Locke when writing to parliament about the unintended effects of interest rate rises. However, it was popularized in 1936 by American sociologist Robert K. Merton who looked at unexpected, unanticipated, and unintended consequences and their impact on society.

Fundamental Attribution Error

fundamental-attribution-error
Fundamental attribution error is a bias people display when judging the behavior of others. The tendency is to over-emphasize personal characteristics and under-emphasize environmental and situational factors.

Outcome Bias

outcome-bias
Outcome bias describes a tendency to evaluate a decision based on its outcome and not on the process by which the decision was reached. In other words, the quality of a decision is only determined once the outcome is known. Outcome bias occurs when a decision is based on the outcome of previous events without regard for how those events developed.

Hindsight Bias

hindsight-bias
Hindsight bias is the tendency for people to perceive past events as more predictable than they actually were. The result of a presidential election, for example, seems more obvious when the winner is announced. The same can also be said for the avid sports fan who predicted the correct outcome of a match regardless of whether their team won or lost. Hindsight bias, therefore, is the tendency for an individual to convince themselves that they accurately predicted an event before it happened.

Read Next: Biases, Bounded Rationality, Mandela Effect, Dunning-Kruger Effect, Lindy Effect, Crowding Out Effect, Bandwagon Effect.

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Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
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