Evaluators often overestimate, ex-post, their ability to have predicted a known outcome. Arguably, judges and juries, in turn, blame external auditors for their failure to anticipate negative client outcomes and to disclose what in hindsight is outcome diagnostic information. The extent to which judges succumb to nonnormative hindsight bias may relate to the perceived feasibility (or ease) of reconstructing a causal relationship between the outcome and antecedent conditions. That is, hindsight bias arguably relies upon: (1) the ability of the evaluator, ex-post, to reconstruct a cogent causal series of related events leading up to the outcome, and (2) the tendency of overestimate the ex-ante likelihood of the reconstructed scenario. If ease of causal reconstruction of events is determined to enhance hindsight effects, remedial attention might be directed at this feature of the phenomenon. An experiment was conducted involving 96 general jurisdiction judges. We examined whether the nonsusceptibility of events to causal reconstruction would serve to moderate the magnitude of hindsight effects. Our hypothesis was that if an outcome could be attributed to a causal series of related events, judges would exhibit greater hindsight bias than if an outcome was perceived to be unforeseeable. That is, outcomes attributable in increasing degree to unforeseen causes were expected to be associated with decreasing hindsight effects. Results confirmed these expectations; implications for audit legal liability are also discussed.
|Original language||English (US)|
|Number of pages||25|
|Journal||Journal of Accounting and Public Policy|
|Publication status||Published - Jun 1998|
ASJC Scopus subject areas
- Sociology and Political Science