The term “hindsight bias” refers to the tendency of viewing past events as more predictable than they really were.
For example, many sports believe that they knew the outcome of the event before it happened. This is referred to as the knew-it-all-along phenomenon. But as they say: hindsight is 20/20.
Here’s everything you need to know about how hindsight bias affects sports bettors.
Examples Of Hindsight Bias
Gambling and sports betting is rife with hindsight bias. For example:
- A lottery player was one number away from winning a large sum and feels convinced she knew the missing number was going to come up — even though she always chooses numbers randomly.
- Arsenal lost the North London derby and a supporter feels convinced that he knew they going to lose to Spurs — even though he remained neutral/optimistic before the game.
- A Roulette player bet on black and lost, but feels convinced that he went against his gut — even though he thought black was “due a win” before the wheel was spun (which is also gambler’s fallacy).
The common theme is that people often recall their predictions before the event as much stronger than they actually were.
How Hindsight Affects Sports Bettors
While anyone is able to offer a guess as to an outcome, there is no way to be certain what’s going to happen. Yet gamblers will look back at results and think they could’ve done better.
Sports bettors have a tendency to accept winning bets at face value, but to somewhat distort the truth about losses: it was a “near miss”; it shouldn’t have happened because the correct choice was clear; I won’t make the same mistake next time.
This rationalisation can cause bettors to become over-confident in their predictive methods, and to overestimate future success. It can lead to unnecessary risks and compounding losses as a result.
Bettors are often unwilling to acknowledge that losses could stem from fundamental weakness in their approach or, quite simply, variance has occurred in results. After all, good and bad luck does play a part in short-term success and failure for any form of gambling.
Can We Overcome Hindsight Bias?
Consider things that might have happened but didn’t: the good and the bad. In sport there’s so many scenarios that might have swung a bet in or out of your favour. It’s important to mentally review multiple potential outcomes in order hold a more balanced view of an outcome’s apparent inevitability.
I recommend keeping a record of all betting decisions you make. What lead you to place the bet? Was it part of a selection method, or a random choice?
Having a log to refer back to can help to minimise hindsight bias. While you may believe that you knew the winner/loser all along, the log may suggest otherwise.
More generally, bettors need to avoid thinking of bets in terms of “right” and “wrong”. Selecting a winner does not necessarily mean you made a smart bet, as much as selecting a loser doesn’t mean it was a bad choice. Ultimately a good, well-informed bet should be dictated by how likely a series of similar bets would perform over a large data set. A good bet comes down to whether or not it has value.
To learn more about determining a “good” and “bad” bet, I highly recommend reading up about Beating the Closing Line. This is the marker by which you can assess every bet you place.
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