Outcome Bias 🃏

🧠 Psych - 2 / 100

Hey,

How’s it going? All good?

Today, we will talk about the Outcome Bias 🃏.

What is it?

Judging a decision based on the outcome - rather than how exactly the decision was made in the moment.

Example -

Imagine going to Las Vegas 🌆

Let’s say, you go to one of the casinos and Win a lot of money! 🥳

You might feel awesome BUT remember, it doesn't mean gambling your money is a smart decision!

Where does it occur?

Outcome bias arises when a decision is based on the outcome of previous events, without regard to how the past events developed.

It happens in casinos, lotteries, real estate, stock market.

Why do I need to know?

Just because you achieve something where stakes were high doesn’t mean Odds are in your favor (not always).

We are prone to give things constant try because of one successful event that happened, momentarily.

Takeaways

1. Always account ALL the factors surrounding a situation.

2. Don’t make decisions based on one (positive) event.

3. Rethink about spending a fortune in gambling or stocks.

References:-

• https://www.investopedia.com/terms/o/outcome-bias.asp

• https://en.wikipedia.org/wiki/Outcome_bias