Thesis (Ph. D.)--University of Washington, 2003. / Vita. Includes bibliographical references (leaves 59-63).

Thesis (M.A.)--University of Toronto, 2005. / Includes bibliographical references (leaves 43-45).

The purpose of this doctoral thesis is to deepen theoretical understanding of the role that hindsight plays in foresight. The thesis argues that the past is not an isolated static state, but one that is intimately connected with the future. However, there are several biases that influence our perceptions and conceptions of the past. These biases act as constraints on strategic learning by limiting our ability to understand the driving forces that emerge from the past, play out through the present and become critical uncertainties in the future. They can result in misperceptions about events or processes, and as such, may impair foresight methodologies such as scenario thinking. Such foresightful thinking flaws are characterised by a combination of hindsight biases and creeping determinism, which result in searching for information that corresponds to people's views about both the past and the future, logical path-dependencies, misaligned dominant logics, routines, recipes and paradigms, and over-confidence and defensive pessimism. Drawing on received research in psychology, the role of counter-to-factual reasoning as a heuristic is discussed and analysed as a possible antidote to foresightful thinking flaws. The judicious use of such a heuristic device as counterfactual reasoning, both as a sense-making process and as an analytical reasoning tool applied to the analysis of historical data, the thesis concludes, is a method for investigating and discovering the past and fortifying foresightful strategic thinking.

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I Role of Behavioral Finance in Portfolio Investment Decisions: Evidence from India Abstract Extreme volatility has plagued financial markets worldwide since the 2008 Global Crisis. Investor sentiment has been one of the key determinants of market movements. In this context, studying the role played by emotions like fear, greed and anticipation, in shaping up investment decisions seemed important. Behavioral Finance is an evolving field that studies how psychological factors affect decision making under uncertainty. This thesis seeks to find the influence of certain identified behavioral finance concepts (or biases), namely, Overconfidence, Representativeness, Herding, Anchoring, Cognitive Dissonance, Regret Aversion, Gamblers' Fallacy, Mental Accounting, and Hindsight Bias, on the decision making process of individual investors in the Indian Stock Market. Primary data for analysis was gathered by distributing a structured questionnaire among investors who were categorized as (i) young, and (ii) experienced. Results obtained by analyzing a sample of 92 respondents, out of which 53 admitted to having suffered a loss of at least 30% because of the crisis, revealed that the degree of exposure to the biases separated the behavioral pattern of young and experienced investors. Gamblers' Fallacy, Anchoring and...

The current research sought to clarify the diverging relationships between counterfactual thinking and hindsight bias observed in the literature thus far. In a non-legal context, Roese and Olson (1996) found a positive relationship between counterfactuals and hindsight bias, such that counterfactual mutations that undid the outcome also increased participants’ ratings of the outcome’s a priori likelihood. Further, they determined that this relationship is mediated by causal attributions about the counterfactually mutated antecedent event. Conversely, in the context of a civil lawsuit, Robbennolt and Sobus (1997) found that the relationship between counterfactual thinking and hindsight bias is negative. The current research sought to resolve the conflicting findings in the literature within a legal context. In Experiment One, the manipulation of the normality of the defendant’s target behavior, designed to manipulate participants’ counterfactual thoughts about said behavior, did moderate the hindsight effect of outcome knowledge on mock jurors’ judgments of the foreseeability of that outcome as well as their negligence verdicts. Although I predicted that counterfactual thinking would increase, or exacerbate, the hindsight bias, as found by Roese and Olson (1996), my results provided some support for Robbenolt and Sobus’s (1997) finding that counterfactual thinking decreases the hindsight bias. Behavior normality did not moderate the hindsight effect of outcome knowledge in Experiment Two, nor did causal proximity in Experiment Three. Additionally, my hypothesis that self-referencing may be an effective hindsight debiasing technique received little support across the three experiments. Although both the self-referencing instructions and self-report measure consistently decreased mock jurors’ likelihood of finding the defendant negligent, and self-referencing instructions decreased their foreseeability ratings in studies two and three, the self-referencing manipulation did not interact with outcome knowledge to moderate a hindsight bias effect on either foreseeability or negligence judgments. The consistent pattern of results across the three experiments, however, suggests that self-referencing may be an effective technique in reducing the likelihood of negligence verdicts.

This thesis aims to understand the risks faced by organizations operating in Northern Sweden when making decisions about digitalization. Through empirical analysis and discussion, the study investigates the influence of hindsight bias on risk perception and the decision-making process. The findings indicate that there is an arguable elevated level of hindsight bias is observed among all participants, with varying intentions behind this bias. One specific case highlights the influence of external decision-makers and the implications of their expertise. While an organization is acting in good faith by seeking advice from individuals of expertise as external decision-makers, who prioritize utility-maximizing choices, it exposes the organization to potential non-perceivable risks. The study reveals that individuals tend to overlook the risks associated with digitalization until they face tangible implications. However, the perception of risks is not artificially altered by expertise level, but rather triggered by occurrences. Moreover, the study identifies a pattern of elevated levels of hindsight bias, primarily in terms of foreseeability, coupled with a motivation for self-esteem. This pattern emphasizes the lack of communication regarding digitalization risks, which contributes to overconfidence and myopia in the decision-making process. The empirical analysis supports the notion that positive perceptions of digitalization and a failure to acknowledge possible implications result in individuals overseeing risks. Consequently, organizations in Northern Sweden run the risk of overconfidence and oversight if they fail to question the basis of their digitalization decisions or the motives and biases of their employees involved in the decision-making process.  In conclusion, this thesis reveals that the risks faced by organizations operating in Northern Sweden when making decisions about digitalization include a failure to perceive digitalization risks due to preconceived positive perceptions, which affects both employees and decision-makers, concluded from a two-perspective investigation. This behavior puts organizations at risk of overconfidence, particularly in the context of hindsight bias. Finally, the study responds to a research question inquired by past research and confirms that overconfidence reduces the availability of risks in the case of Northern Sweden.

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For the purpose of the study we varied the outcome of a sequence of ambiguous behaviors performed by an imaginary individual during World War II. Compared to a control condition where no outcome was presented, this person either ended up saving Jews (heroic behavior) or denouncing Jews to the Gestapo (cowardly behavior). After one week, behavioral antecedents that were consistent with the outcome were likely to be recalled and communicated. Results suggest a tendency  towards forming extreme impressions of the target, depending on the outcome. These extreme impressions in turn guide the recall and evaluations of predictability, and also impact on communication about these episodes and thereby on the formation of collective memory. / Para el estudio se varió el resultado final de una secuencia ambigua de conductas realizadas por una persona ficticia durante la Segunda Guerra Mundial. Después de la secuencia ambigua de acciones, en una condición control no se producía ninguna consecuencia, en otra condición de heroísmo la persona salvaba la vida de Judíos y en otra condición de cobardía los denunciaba a la Gestapo. Los antecedentes congruentes con la conducta final se recordaron y comunicaron más una semana después. Esto sugiere una tendencia a inferir juicios extremos a partir de la conducta final del personaje, que a su vez influyen en el recuerdo en relación al nivel de previsibilidad de la conducta del personaje, e influyen en la comunicación sobre el hecho y la memoria colectiva.

Psychological aspects of evidence evaluation: Abstract The diploma thesis focuses on the topic of judging and decision-making within the process of evidence evaluation. Its main goal is to identify and describe cognitive illusions which can have a negative impact on the process of evidence evaluation. The mutual position of psychology and law in also considered within introductory chapters. The decision making of the judges is initially described by theoretical models. Three cognitive illusions that are essential for evidence evaluation are described in the following chapter. It is anchoring heuristic, hindsight bias and confirmation bias. Eventually risks, which these cognitive illusions represent for evidence evaluation, are described and forms of countermeasures are discussed. One chapter of the thesis is devoted to the description of ego depletion, which could pose another limit for the process of evidence evaluation. Ego depletion describes decline of self-control in cases which demand conscious effort. The judges are probably in a risk of ego depletion. This phenomenon can lead to higher vulnerability towards cognitive illusions and stronger tendency to maintain status quo. Possible countermeasures are described and discussed on one hand against anchoring, hindsight and confirmation bias and on the...