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Psychology

Outcome Bias

The documented cognitive bias of rating identical decisions more favorably when told the outcome was good, even when explicitly stating that outcomes should not affect evaluation (Baron and Hershey, 1988). Automatic, self-deceptive, and confirmed by a 2023 pre-registered replication with an even larger effect size.

See also
Psychology Resulting Annie Duke's term (Thinking in Bets, 2018) for the error of judging decision quality by outcome quality. A bad decision that produced a good outcome is still a bad decision. A good decision that produced a bad outcome is still a good decision. The most expensive wins in trading teach the wrong lesson. → Psychology Decision Quality The soundness of a decision evaluated against the information available at the time it was made, before the outcome was known. The Architect's only unit of judgment. A plan-followed loss is a high-quality decision with bad variance; an unplanned YOLO that printed is a low-quality decision with good luck. → Psychology Hindsight Bias Perceiving past events as having been predictable after the fact. Documented by Fischhoff (1975) as creeping determinism. In trading, it corrupts post-mortem reviews by replacing actual pre-outcome reasoning with what would have been correct — making learning structurally impossible without a contemporaneous written record. →
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