Reviews of Important Papers on Forecasting,
1985-1995 Reviews
Review of:

Davies, Martin, F. (1987), "Reduction of hindsight bias by restoration of foresight perspective: Effectiveness of foresight and hindsight-retrieval strategies," Organizational Behavior and Human Decision Processes 40, 50 – 68.

This study reports three related experiments. Each used descriptions of four previously published forecasts to determine what procedures can be used to reduce hindsight bias (the ‘I knew it would happen’ effect). It was found to be helpful to ask subjects to review the ideas that they had written about the situation before learning about the outcome. After receiving knowledge of the outcome, it helps to have the subject write reasons for each possible outcome. The latter procedure was judged to be somewhat more effective. Implications for practitioners: Get the client involved both before and after the outcome and ask them to give reasons for and against each outcome. This will reduce, but will not eliminate hindsight bias.