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Hindsight bias is more likely to occur when the outcome of an event is negative rather than positive. [14] This is a phenomenon consistent with the general tendency for people to pay more attention to negative outcomes of events than positive outcomes. [15] In addition, hindsight bias is affected by the severity of the negative outcome.
Other types of forecasting include forecasting models designed to predict the outcomes of international relations or bargaining events. One notable example is the expected utility model developed by American political scientist Bruce Bueno de Mesquita, which solves for the Bayesian Perfect Equilibria outcome of unidimensional policy events ...
The actual outcome of the decision will often be determined by chance, with some risks working out and others not. Individuals whose judgments are influenced by outcome bias are seemingly holding decision-makers responsible for events beyond their control.
Studies suggest that much of human thought is directed towards potential future events. Because of this, the nature and evolution of foresight is an important topic in psychology . [ 1 ] Thinking about the future is studied under the label prospection .
Lichtman has correctly predicted the outcome of almost every election over the last half-century, except for the race in 2000, in which Republican George W. Bush defeated Democrat Al Gore.
In a non-statistical sense, the term "prediction" is often used to refer to an informed guess or opinion.. A prediction of this kind might be informed by a predicting person's abductive reasoning, inductive reasoning, deductive reasoning, and experience; and may be useful—if the predicting person is a knowledgeable person in the field.
Scenario analysis is a process of analyzing future events by considering alternative possible outcomes (sometimes called "alternative worlds"). Thus, scenario analysis, which is one of the main forms of projection, does not try to show one exact picture of the future.
More generally, decision theory, which is based on a fixed universe or a model of possible outcomes, ignores and minimizes the effect of events that are "outside the model". For instance, a simple model of daily stock market returns may include extreme moves such as Black Monday (1987) , but might not model the breakdown of markets following ...