Aaron decided to invest his money in several technology start-ups. He was quite excited and told his wife about his new financial venture. She was very supportive. Eighteen months later, all but one of the companies had declared bankruptcy. Aaron's wife was furious and told him that "anyone" could have seen that these companies were going to fail. This illustrates:

Question

Wesley Frost

Business

1 October, 06:37

Aaron decided to invest his money in several technology start-ups. He was quite excited and told his wife about his new financial venture. She was very supportive. Eighteen months later, all but one of the companies had declared bankruptcy. Aaron's wife was furious and told him that "anyone" could have seen that these companies were going to fail. This illustrates:

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Answers (1)

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Lizbeth Braun · Answer 1

Hindsight bias

Explanation:

"Hindsight" refers to. understanding an event post it's occurrence. Hindsight bias refers to a psychological term that conveys an individuals overestimated belief of understanding and predicting the outcome of a situation when it could not have been actually predicted.

Such behavior usually arises when the outcome of a situation turns out to be negative.

In the given case, Aaron's wife initially agreed with his investment plans. Subsequently, when the outcome did not turn out as expected and majority of those companies crashed, she grew furious, claiming she already knew the outcome (losses). This situational behavior indicates Hindsight bias.