Outcome bias

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Outcome bias is a cognitive bias which refers to the tendency to judge a decision by its eventual outcome instead of judging it based on the quality of the decision at the time it was made.

For example, in one scenario, a real estate agent fails to disclose to the customers the high probability of the basement of the house flooding. This risk exists at the time of his decision not to tell his customers, regardless of whether there actually is a flooding later or not.[note 1] Therefore, this decision should be viewed negatively in both cases. However, in reality, the agent will in most cases be viewed much more negatively if the basement is actually flooded. While this is emotionally understandable, purely logically it should not make a difference. This example also portrays how outcome bias is much more likely in case of negative events.[1]

Outcome bias might be mistaken for hindsight bias. The difference is that hindsight bias describes a situation where the "correct" choice at the time of the decision seems obvious later on (with the benefit of hindsight), while it really was not at the time.

Hindsight bias is a psychological phenomenon that allows people to convince themselves after an event that they accurately predicted it before it happened. This can lead people to conclude that they can accurately predict other events.


  1. It is also possible that the real estate agent didn't know about the flood risk, rather than intentionally neglecting to inform the customers.


  1. Francesca Gino, Don A. Moore, Max H. Bazerman. (2009) No harm, no foul: The outcome bias in ethical judgments. Harvard Business School NOM Working Paper No. 08-080