Hindsight bias and outcome-consistent thoughts when observing and making service provider decisions

Two studies examined the relationship between hindsight bias and corresponding open-ended thoughts for decisions in a service provider setting. Perspectives of those observing and making decisions were examined. In study 1, business students who learned the results of a financial advisor's stock purchase showed the traditional hindsight effect regardless of outcome favorability, and produced heightened outcome-consistent thoughts. In contrast, study 2 participants were asked to make (rather than to observe) a purchase decision. They produced hindsight bias and consistent thoughts only when their decision outcomes were favorable. Relative to observers, those acting as the service provider (a) showed more bias when outcomes were favorable, and (b) showed less bias when outcomes were unfavorable. Discussion focuses on hindsight implications in service provider decision-making settings.