week 8

Louie, Curren, and Harich (1, 7, 15)

1. Describe the "knew it all along affect," and how it relates to the opening scenario described by the authors and teh the Washington Public Power Supply System(WPPSS). 

Research indicates that hindsight distortion can influence post outcome perceptions. This bias occurs when outcomes seem more inevitable in hindsight than they did in foresight. This is referred to as the “knew-it-all-along-affect,” hindsight bias occurs when individuals feel as if they would have predicted the outcome to dance better than they actually did, for better than they actually would have had they’ve been asked to make a forecast. Even when individuals are specifically asked to have more information. 

In a lawsuit against WPPSS, investors claimed that they should have known that the demand for power would change such that there would be no longer a need for large-scale high-technology projects. WPPSS, however, claimed throughout the process that the default was unfortunate but not highly foreseeable.  Based off the rules of the “knew-it-all-along-affect” it would make sense in terms of legal strategies for WPPSS to state that the default was not foreseeable and for investors to claim it was.  Yet, because of mechanisms that influence hindsight reasoning, it is also possible that each team to some degree truly believed their position

7. Describe what you would have been asked to do, had you been a participant in the experiment. 

I would use a marketing strategy computer simulation game called “MARK-STRAT.”  Using this game I would be put on a team with other students for my class and assigned to one of five business firms with the goal of strengthening the business’s marketing position.  I would meet with members of my firm regularly to make a series of managerial decisions.  At the start of the games, each participant was asked to review the first set of decisions made by those in the target firm that I was assigned to evaluate. I would then be asked to make predictions about the target firm’s upcoming market share.  I would be competing with other teams and my firm’s performance would be dependent on the decisions that were made as a team. One week after making predictions, and after the game administrator had run the market simulation, I would be presented individually with the decision information that I reviewed earlier. I would also receive updates regarding the target firm’s actual performance.  After being reminded that I had made prediction a week earlier, I would then make post-dictions regarding the target firm’s market share.

15. Describe the avenues for future research suggested by the author. 

Although the researchers hope that there work provides insight into hindsight bias for team decisions, they believe it would be worthwhile to pursue search outside of the classroom setting to see whether the same pattern of hindsight bias emerges. In addition, this study is limited in that it measures hindsight bias the competitive task that was need you to participants. Future research can explore the relationship between expertise in personally relevant team settings. The Long-Term Capital Management example, which showed that achievement-oriented individuals who have obtained past successes may be more susceptible to hindsight effects, is an area of research also suggested by the authors.   All-in-all, Future research can test the applicability of, as well as build on, studying a variety of team decision-making settings