Learning from Experience: Coping with Hindsight Bias and Ambiguity

Forecasts are made with foresight but evaluated with hindsight. Knowing what has happened can degrade these evaluations, reducing forecasters’ ability to learn from experience. Hindsight knowledge can also reduce the chances that forecasters will be judged fairly by those who rely on their work. Ambiguous forecasts create further barriers to evaluation and learning, making it hard to know just what they are predicting or how accurate they have been. Practitioners can reduce these threats by attending to how forecasts are formulated, communicated, and evaluated.

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