The Effects of Disappointment on Hindsight Bias for Real-World Outcomes MARK V. PEZZO 1 * and JASON. W. BECKSTEAD 2 1 University of South Florida, St. Petersburg, USA 2 College of Nursing, University of South Florida, USA SUMMARY Examined the effects of motivated processing on hindsight bias. One hundred fifty three college students estimated and later recalled the likelihood that 30 self-relevant events would occur during the next 2 months. Multi-level modelling was used to determine the (within-subject) effects of expectations, event valence and event controllability on hindsight bias and the extent to which these effects were moderated by participants’ need for cognition (NFC) scores (between-subjects). For events that actually occurred, we found support for defensive processing in that the bias was smaller for negative events. Also, for events that actually occurred, those judged as more controllable produced a larger bias. Neither valence nor controllability had any effect on the size of the bias for events that did not occur. The size of the bias for occurrences did not differ significantly from that for non-occurrences. Finally, NFC did not moderate the effects of valence or controllability, nor did it directly affect the size of the bias. Copyright # 2007 John Wiley & Sons, Ltd. Wish I didn’t know now what I didn’t know then. —Bob Seger Failure and disappointment are inevitable. New businesses, political campaigns and romantic pursuits fail more often than they succeed. When they do, we usually try to make sense of what went wrong (Wilson, Gilbert, & Centerbar, 2003). Disappointed sports fans and ex-lovers alike struggle to understand in hindsight what they didn’t know in foresight. Whether or not we learn from such failures may depend on the degree to which we ex- perience hindsight bias (Pezzo & Pezzo, 2007). Also referred to as the knew-it-all- along-effect, the hindsight bias occurs when we overestimate how predictable an outcome was in foresight. This phenomenon has been studied extensively (Christensen-Szalanski & Willham, 1991; Guilbault, Bryant, Brockway, & Posavac, 2004; Hawkins & Hastie, 1990) since first proposed by Fischhoff (1975). Current research has primarily focused on two issues — the degree to which surprising outcomes enhance, reduce, or reverse the bias (e.g. Ofir & Mazursky, 1997; Pezzo, 2003; Schkade & Kilbourne, 1991), and the degree to APPLIED COGNITIVE PSYCHOLOGY Appl. Cognit. Psychol. 22: 491–506 (2008) Published online 27 June 2007 in Wiley InterScience (www.interscience.wiley.com) DOI: 10.1002/acp.1377 *Correspondence to: Mark V. Pezzo, Psychological Sciences, USFSP, St. Petersburg, DAV 258, 140 S. 7th Ave, St. Petersburg, FL 33701, USA. E-mail: pezzo@stpt.usf.edu Copyright # 2007 John Wiley & Sons, Ltd.