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By Staff Reporters
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Outcome bias is judging a decision based on its result rather than the quality of the decision at the time it was made.
It’s like saying a bad poker play was smart because you won the hand. Or, a bad stock picker or financial advisor was good because the price went up!
According to psychologist and colleague Dan Ariely PhD, this bias ignores the process and focuses solely on the outcome. It’s why we celebrate lucky breaks and criticize thoughtful risks that didn’t pan out.
So, the next time you’re evaluating a decision, focus on the reasoning behind it, not just the end result.
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Filed under: "Ask-an-Advisor", Ethics, Financial Planning, Funding Basics, Glossary Terms, iMBA, Inc., Investing, LifeStyle, mental health | Tagged: AI, artificial intelligence, bias, CFP, CMP, Dan Ariely PhD, decision bias, financial advisor, iMBA, mental health, outcome, outcome bias, outcomes, psychology, reasoning, stock brokers, Technology | Leave a comment »
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