Hindsight bias explains why "I knew it all along" is such a common phrase. People overestimate their ability to have predicted past events, even when the outcome was completely unpredictable. Although the hindsight bias is widely accepted today, the underlying mechanisms that explain it are still debated: some researchers point out cognitive mechanisms (such as confirmation bias), while others argue that metacognition and differences between individuals are also at play. The problem associated with this bias is that it causes us to believe that the causes of past events were simpler than they were. Misunderstanding causes hurts our ability to predict and change future events. Understanding this bias is therefore fundamental in allowing us to learn from our experiences and mistakes.
Beyth and Fischhoff asked subjects to estimate the likelihoods of certain events occurring from Richard Nixon’s diplomatic trip. They were later asked, after the trip had occurred and outcomes were known, to reconstruct their own predictions. They assigned higher remembered probabilities to the events that had occurred, and lower remembered probabilities to events that did not occur.