But these typically annoying clichés about living a good life are inherently flawed.

Why? These clichés fail to tell us how to leave the past behind.

But I’m here to help you with that.

So read on if you're willing to become the person you’ve always wanted to be.

👉 So What is Hindsight Bias?

Hindsight Bias, or the “I knew it all along phenomenon,” is a psychological tendency people have to assume that they knew the outcome of an event after the outcome has already been determined.

“I knew that this stock that no one’s ever heard of would quadruple in value in just one week, so I should’ve invested my life savings in it! Who cares if it’s a meme coin and it looks like a disfigured chimpanzee, I knew this would happen!”

No, you didn’t. You just think that you did.

Of course, this can make life pretty difficult. You’d begin to think you’re this incredible Einstein-reborn-esque genius simply because you think you predicted something, when it’s nothing but hope or gross oversimplification.

And this leads to an endless loop of a “Eureka!” moment, followed by constant regret.

After all, if you could predict what was to happen, why didn’t you act on it?

👉 What Influences Hindsight Bias?

Research says there are three key variables that contribute to hindsight bias. Consider these three variables to be, let’s say, butter, flour, and sugar. When they combine, they form a cake. A mouldy, bland, existential cake of hindsight bias.

If it’s not obvious enough, baking isn’t my forte, but let’s bake a cake anyway.

🔸 Cognitive (butter)

My place of work takes elections extremely seriously. They have speeches, polling data, sense checks, campaigning—you know, the whole shabang.

Being the methodical person I am, I voted based on all this data that I had available to me. I was confident I’d made the right decision, because how could the numbers lie? (This was unrelated to the bribes on offer, of course.)

A few days later, the results were in. The person I voted for... lost? But no matter, I never fully trusted the data anyway. In fact, I was so unsure of who would win that I used the data as a crutch to help me make my decision. No, I could never have been so sure that the candidate I voted for—the losing candidate—would be the winner.

See what I’m getting at here?

The butter of this pudgy mess of a cake is essentially people misremembering or distorting their predictions of an event.

Just as I misremembered my conviction of the person I voted for (again, unrelated to that massive bribe), we change the predictions we made in foresight to one blatantly ruled by hindsight. We want to be correct—to feel validated—about our “prediction,” even if that means mistaking hindsight for foresight.

🔸 Metacognitive (flour)

Look, we all like being right. And I get it. I mean, it hurts to be wrong, doesn’t it? I remember when I was so convinced that my sister was actually an alien parasite sent down to torment me. The day I found out that it was just my sister’s personality—not the universe punishing me—was a sad, sad day.

Essentially, metacognition stems from people understanding why or how an event occurred, making it seem as if the event was predictable.

If I understand why England lost another FIFA World Cup (general incompetency), predicting that they would lose it way before they actually did seems like a much easier feat.

Actually, let me explain this with a story. Say hello to my friend, Billy.

You see, Billy thinks he has a knack for investing. Investing in his mental well-being? No. Investing in building relationships? Who needs friends anyway? Investing in a mirror so he can feed into his narcissistic tendencies? Well, yes, but no.

Billy decided to invest in the stock market. He invested $10,000 in this ludicrous stock, thinking he had the ability to pump and dump. Naturally, this failed miserably. Billy was so far in debt that the bank decided to even take away his brand new mirror.

As Billy wept over his lost mirror, he tried to figure out why his scheme had failed. Who knew that investing in the stock of a company on the verge of bankruptcy while having no influence or charisma to attempt a pump and dumb would fail miserably?

So Billy beat himself over his lost money and pride. He understood why he failed and mistook that understanding for something he should’ve known as foresight.

He’s beating himself up for something he’s realised in hindsight, but he thinks it is foresight. That’s the issue with hindsight bias. Billy thinks this was entirely his fault and he should have known about it earlier, but the only reason he thinks this is because he knows about it now.

And here we have loop of smugness and inaction.

🔸 Motivational (sugar)

Every good cake needs some sugar. Hindsight bias needs one last sprinkle of evil.

Motivational refers to the world as a predictable realm. Some events are inevitable, and you know that they will happen, just not when. Let me explain:

Say you live in a region where earthquakes are common. Naturally, you’re accepting of the fact that an earthquake can occur at any point in time. It’s an inevitability.

You take the necessary precautions—chaining your cupboards to the wall, using your brother as a shield to protect you from falling objects—but there are some precautions that you can take only when the earthquake hits.

And one day, the earthquake hits. Your house suffers considerable damage, and your brother really wasn’t an effective shield. You lie down, head in hands, blaming yourself for the damage done to your house because you knew that the earthquake was inevitable.

What you don’t consider is that, even though the earthquake was bound to happen, trying to predict exactly when it happens and how strong the earthquake will be is almost impossible.

So beating yourself over the damage of the earthquake is almost inconsequential. You did all that you could; you just don’t believe it in hindsight.

And now you have a terrible tasting cake.

👉 The Woes of Hindsight Bias

Let’s say the government of Country A has to implement a new policy. They have two options: try and fix the potholes in country A’s capital city, or raise tax rates and pocket all the earnings.

Whew, this is a tough choice.

After careful deliberation, they decided to fix the potholes. And it’s a huge success! Traffic has never been lower, and there’s even less pressure on the metro as the demand for buses has risen. Who knew a good government could be beneficial?

This decision was a tough one to make for the government, but as soon as the outcome was positive, any mention of having to deliberate on the manner was soon forgotten. To the government, it was a simple decision and one of great intelligence.

In this example, everyone’s a winner, but by failing to understand that the decision wasn’t clear-cut and that it was more complicated than it appeared, the government finds itself in a precarious situation in the future.

You see, the government didn't realise how hindsight had swayed them. In fact, they didn’t know hindsight was a thing. When they found out about it, they implemented a “hindsight tax.”

But anyway, the government was swayed by their previous successes and implemented new policies left and right. The final straw was when they taxed a man called Adi for… making terrible jokes?

People weren't happy. They rioted and pillaged every government building they could see. And the government was confused.

“Why is this happening? The last time we implemented a policy, it went so well, and we made the decision so quickly!"

The government didn’t bother considering that they were, in fact, unsure of their decision. They were swayed by the premise of their incredible predictive capacity and didn't apply it to the future. They should have learned from their mistakes in judging with hindsight, but they didn’t.

And the same can apply to FPL (Fantasy Premier League).

Essentially, it’s about keeping your relationship with FPL in check. If you burden yourself with each and every outcome—an outcome that you have no way of predicting—you are simply making life worse for yourself.

You couldn't have known that Haaland would pick up an injury midway through a game City won 5-0 and be subbed off with a blank.

But, in hindsight, you can say, “I knew Haaland would blank! I should’ve captained someone else!”

You didn't know that. No one did. If you knew that City scored five, you’d have captained Haaland anyway.

So simply knowing about hindsight bias—and the ability to differentiate between hindsight and foresight—can make your life far easier.

👉 Keeping Hindsight Bias in the Rearview Mirror

Let’s start with an exercise. Take your left palm and hold it up in the air. Now take your right palm and bring it against your left palm. Repeat this multiple times, and voila! You’re clapping for yourself. And that’s exactly what you should do, because knowing about hindsight bias is the first step to getting rid of it.

Next, plan for different scenarios and write them down somewhere. That way, when you start having hindsight-y thoughts, you have your thought process to remind you that the supposed foresight was not your fault.

Embrace uncertainty. The world isn’t predictive, and learning to let go and know that you cannot control certain outcomes will naturally lower your susceptibility to hindsight bias.

And take responsibility for your decisions. Just because it may appear as if you regret a decision made in hindsight doesn’t mean that your decision-making was optimal in foresight. But it could’ve been. And taking responsibility for it increases the likelihood of optimal decision-making in the future.

Even if that means forgetting about what could have been.

Of course, it's easy to blame extrinsic factors—my boss hates me; how can I succeed?!

But sometimes, we’re the problem.

Actually, let me rephrase that: sometimes, we’re the solution.

How so? Let’s continue reading to find out, shall we?

👉 So What is Self-Serving Bias?

Self-serving bias describes our tendency to attribute positive events and successes to ourselves and our actions but blame negative outcomes on external factors that are out of our control.

“I aced this test because I’m this super-smart, an Einstein in the making who can never go wrong! You’re all inferior to me, muahaha!”

“I failed this test because my teacher hates me. This is all their fault; if I had a better teacher, *sobs*, I’d do so much better.”

See what I’m getting at?

Believing that you’re always right (however good that is for your ego) and attributing your failures to someone else just because you can’t take your own failure (I’ll get to this later) will just keep you in an endless cycle of seeking self-improvement and breaking down at your failures.

Essentially, it comes down to the humane need to maintain, or enhance, your self-esteem.

We reject negative feedback and simply focus on what we’ve done well, thereby increasing the magnitude of what we’ve done well, even if that’s only a small portion of our entire task.

After all, it’s easier to do that than say, “Okay, I did a bad job. Now my ego has a boo-boo and can only be fixed by alcoholism.”

👉 What Influences Self-Serving Bias?

Okay, it’s not all your fault. Your life isn’t simply a void of nothingness lathered with the tears of despair.

There are two main reasons for self-serving bias.

I’ve already spoken about one of them: self-enhancement. This is where we rely on motivation to maintain our self-esteem.

Essentially, you’re being selective with the information you choose to accept or reject, much like a bored girl swiping on Tinder. You take the information that helps you feel good (the man who is nothing but a tool to grow your already large ego) and reject the information that shows a part of you that you don’t want to see (the man who’s calling you a narcissist) because it hurts to accept that we’re not perfect.

But self-enhancement goes further than this. We all have that one god-gifted friend who’s incredible at, let’s say, juggling. And they know they’re good—how could they not?! They juggle lemons better than Tinder Girl juggles men. But they downplay their abilities at juggling simply to get more praise when they eventually juggle.

“You’re so good at juggling! And you’re so humble, too! Who could ever have known about this talent of yours?” I could. You could. It just felt good to hear someone else validate your feelings. And I get it. Of course, I do. A compliment never goes amiss.

But when this feeds into self-presentation, another underlying reason for self-serving bias, you have a concoction that... well, you’ll see.

Self-presentation is an expressive way of conveying information about oneself to others. You claim, or make, an identity for yourself, and you become that identity.

You are it, and it is you.

For better or worse.

Now this seems quite extreme, but I’ve fallen for it in some regard, and you probably have too. But that’s not a bad thing. In fact, self-presentation is usually quite a good thing. Maybe you’re at work and you want your boss to see you as a leader, so you behave more assertively. And that’s okay.

But trying to influence others’ perceptions of you, something that is inherently out of your control, can easily become manipulative or unethical.

Say your friend has been having a difficult time at work. Naturally, they’re seeking solace, see your welcoming hands, and come to you. And what a coincidence! You’ve been wanting to be more compassionate, so you’re there for your friend. At least, you appear to be. You act present and attentive, patting your friend on their back, giving them tissues to blow their nose on, and even some cake to bury their sorrows on, but you’re doing this to present that image of yourself. That image of you as a compassionate friend. Your mind is elsewhere, worrying about your own menial problems, but at least your friend thinks you’re empathetic to their struggles.

And there, dear reader, is where your own motives and inability to handle the truth lead to self-serving bias.

You want to validate your ego, so you pretend like you can’t juggle. You want to appear as the “perfect” friend, so you (intrinsically) lie to your friend. You believe that your locus of control and importance to others’ lives are infinite.

Reading this back, it all sounds very accusatory and blame-y. I promise you, it’s anything but. I believe that being straightforward (and sometimes harsh) is necessary for this topic, as otherwise we’d find ourselves back in that loop of only processing information that makes us feel good about ourselves.

Plus, some of the reasons for us wanting to protect our egos (majority, in fact) are completely natural and innate. Positive outcomes feel good, whereas negative outcomes surprise us, so we shy away from the negatives. Some people may have had a tough childhood, riddled with pressure, so a fear of failure leads to a desire to not be in a situation where you have to confront failure.

Sometimes, it’s not your fault, so I apologise for the existential crisis. That said, I’ve fallen for self-enhancement and self-presentation. I probably will again. And that’s true for everyone I know. You’re not alone in this boat, so perhaps we can seek solace in that.

👉 Examples of Self-Serving Bias

I've given you some examples, but let’s look deeper. Let’s consider where you may let your ego get the better of you in… a corporate environment? Maybe even the government and economics. Ooh, what about that time when you were scammed as you shopped online?

🔸 Self-Serving Bias in Everyday Life

We’ve all had our fair share of troubles when shopping online.

I remember when I bought jeans online, and oh my, were they magnificent. They came neatly boxed, without a single wrinkle, and dyed in the perfect blue. It made my day. In fact, it made my year.

I’d just conquered online shopping!

I spent the rest of my day humming and skipping, smelling the roses, and running away from the bees that resided in those roses.

Until the next day. My T-shirt’s make was awful. Humming? Forget it. Roses? Wrinkled. Day? Ruined.

But I soon got over it. It was the manufacturer's fault after all!

It’s not like I forgot to sit and wonder why the T-shirt was so cheap, on a 75% discount, and had a review saying, “Terrible T-shirt. I wouldn't wish it on my worst enemies and mother-in-law." Wait, what do you mean that’s exactly what I did?

When my jeans exceeded my expectations, I didn’t praise the manufacturer or distributor; I praised myself for clicking on one button. When the T-shirt failed to meet expectations but came as advertised, I failed to blame my oversight, instead wishing hell on the supplier who did nothing wrong.

My T-shirt may be awful, and that supplier may get fired for the torrid review I left behind, but hey, at least my self-esteem is good!

Actually, I have another example. This happened to my friend, Billy.

Billy is usually a nice guy. He gets into his car, as you do, and drives to work. Traffic is heavy, but it’s no competition for Billy, as he wades through it as if he were Moses parting the Red Sea. He’s proud of himself, and he rightly pats himself on the back.

But on his way back from work, in his hurry to get back to his pet fish, Billy speeds, takes a wrong turn, and finds himself in the mother of all traffic jams. He’s stuck, and no amount of manoeuvring and sweet-talking is going to get him out any faster.

He curses and blames a traffic cop for his unfortunate outcome. He gets consumed with road rage and yells obscenities that I cannot repeat.

But he doesn't accept that it was his wrong turn that got him into the situation he’s in. Yet he still praised himself for driving well in the morning?

There’s nothing wrong with praising yourself for your success, but if Billy can’t take responsibility for his failures—if the failures weren’t his fault in the first place—were the successes his doing?

🔸 Self-Serving Bias in a Business Environment

For our sustainability campaign, my boss wanted me to have a report on the waste management of a nearby building ready. Essentially, my project involved analysing and solving the issues the business has with its waste disposal.

With the help of a friend, I had the report ready, and boy, oh boy, did I praise myself for it. I never stopped talking about how successful it was. I named myself as the main reason for its success, and where I did attribute some of it to my friend, they deserved proportionately more credit.

What would I have done if it had failed? Blame my friend. Blame the uncooperative building manager. Blame the weather. Blame anyone but me.

That’s the problem, especially in a complex environment such as employment. Team projects require cooperation and admissions of wrongdoing, but when our egos get in the way, we strip a layer off our willingness to admit to a mistake.

In the long run, attributing all successes to yourself and failures to others will make you just that little bit harder to like, and intrinsically, you’ll be unaware of what more you could do to elevate your work to the next level. Why? Coming to terms with our mistakes will help us learn, and if we don’t ever accept our mistakes, what have we learned?

🔸 Self-Serving Bias in Economics

Let’s say Joe lives in Country A. Joe works in finance, and he brings home a decent paycheck every year. But he’s not satisfied. He wants more. The cost of living crisis means he can no longer afford bottled mineral water, and instead he has to settle for (the already potable) tap water.

The injustice???

And coincidentally, the government of Business A has increased the wage thresholds in the financial world. Joe yelps with delight, “They’ve done this for me! I can now live like a king!”

Joe believes that the positive outcome was for his benefit. He uses this belief to validate his own feelings of self-importance, not accounting for how the additional tax money that the government got simply went into funding their own lavish lifestyles. Why should Joe have to care about that, after all?

This ties into confirmation bias. If the political party that Joe supports makes a suboptimal decision (let’s forget fixing the potholes and instead force citizens to pay more bribes!) he may seek information to validate this decision. If it begins to get widely criticised, he’ll blame other factors, such as the police officers who take the bribes or the driver of the car who didn't see the pothole and is now stuck in it.

This doesn’t have to be on a scale as large as the government. Think of salary negotiations. Joe bargains for a larger salary and gets it—yay! But he’s not surprised. He’s a great and efficient employee, after all. But if he hadn’t received his raise, Joe would’ve blamed the economy, for example. Sure, the economy is booming and wages are being increased everywhere, but Joe blames it anyway. He can’t accept that maybe he’s not the star employee he thinks he is or that the time he called his boss “the human embodiment of a pothole” didn’t help his PR.

Why? Joe has fallen for self-serving bias.

🔸 Self-Serving Bias in Football

I was playing football in school some years ago. We’re trailing 1-0 and get a 95th-minute penalty. I stepped up to take it. And I... missed?

I looked down at the turf, mindlessly kicking it, secretly wanting to bring out a ruler and show why its excessive length was the reason I missed. I want to bring out a wind vane and let it show why the wind deviated my shot from the top right corner to the face of an innocent bystander in Row Z.

But I don’t want to admit that I was nervous, and it was a terrible shot. I don’t want to admit that I knew I’d missed as soon as I kicked the ball; instead, I just want to save face.

As the years went on, I believed my lie. I never took the blame for missing the penalty and became a propagandist for trimming turf.

If I had accepted that it was a bad penalty, perhaps I’d have become better at them over the years. I’d have practiced and avoided making the same mistake instead of mowing turf.

This can happen to managers as well. They coach a masterclass until their anything-but-level-headed centerback kicks someone in the face in the 67th minute (it was a mistake, I swear!). They go down to ten men and lose.

Instead of the manager accepting the red card and accepting that the red card was deserved, he blames the referees and, in a moment of stubbornness, refuses to change his tactics. He wallows in the injustice of it all, even when he had the chance to alter his tactics.

The problem never gets resolved, and going down to ten men becomes an everyday occurrence.

Self. Serving. Bias.

🔸 Self-Serving Bias in Fantasy Premier League

You make a risky transfer. Punts are fun, after all. But it backfires miserably. So, you blame everything—the player, bad luck, the FPL Gods—but you don’t consider that the decision you made was objectively bad.

You got carried away making a fun transfer, and hope led you astray. The best thing to do in this case is to accept your mistake and learn from it. If you do, you can grow out of this unfortunate situation, but if you don't, you find yourself in another loop.

That said, when it comes to FPL, it’s best to understand that your locus of control is extremely limited. You can control only a few things, and the outcome is not one of them. So ensure that your process is good, that the decisions you make are good, and that the EV is good, so that you’re more likely to benefit from positive variance.

👉 Solutions and Conclusion

Perhaps the most obvious, yet most aspirational, solution is building self-awareness.

By reading this article and other such pieces of work, you’re learning more about yourself. You’re becoming more self-aware.

So pat yourself on the back and tell yourself that you’re doing a good job!

Become more receptive to feedback. Yes, hearing negative feedback will hurt, but in the long run, you’ll be a better person because of it. Positive feedback is nice, but if all you hear is overly flowery language, the ceiling of your growth is automatically restricted.

Find your definition of success.

Mark Manson has eloquently put down his thoughts on this matter, and I will link it here. When you define your success, you control what your ego needs to be validated; hence, you’re able to minimise just how much positive or negative feedback you’re able to consume.

Take responsibility. Once again, I’ll let Mark Manson do the explaining here. But by taking responsibility, you grow as a person, become more aware of your locus of control, and find solutions even in awkward spots.

Understand that you worry far more about what others have to think of you than they actually do. Coming to terms with this fact—something that even I struggle with—will help you overcome self-presentation and instead focus that energy on yourself.

Be empathetic. Zoom out and look at situations from a rational, third-person perspective. And be open to growing.

Even if that includes being torn down before you rise up. Which you will do.

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CONTENTS

1. Definitions and Causes

2. Examples

2.1 Everyday Decision Making

2.2 Businesses

2.3 Football

2.4 Fantasy Premier League (FPL)

3. Solutions

4. Conclusion

[1. Definitions and Causes]

(Plan) Continuation bias is the cognitive bias that subconsciously prompts us to continue with our original plan despite changing conditions.

“I’ve thought through my original plan so thoroughly, so of course it has to be right?”

Okay, imagine this: you’re in university, and while being all gung-ho and excited about all these new courses you can take, you choose to major in... history? Gah, what were you thinking?! But no worries; your university is flexible. They’ve seen hundreds of students run into the dean’s office, begging to change their major to... well, literally to anything.

So that’s what you do. But wait. “What if I’m meant to do history? Sure, the only thing I know about history is that my grandfather is old, but I planned it out, so maybe I’m better off doing history."

Where that may be true, you may be falling victim to sunk cost fallacy. Or even social pressure.

So even though you didn’t want to do history, you end up taking it, leaving you miserable for the next four years of your life. Neat, eh?

That’s the issue with continuation bias. There are just so many things that can cause it.

One such cause is loss aversion. Kahneman and Tversky (1992) suggested that losses can, psychologically, be twice as powerful as gains.

Just as any rational man does, they conducted a study on this matter. In some cruel, sadistic way, the study has become far too apt for this morbid, post-COVID world we find ourselves in.

Two groups of participants were asked to imagine that the U.S. was readying itself for an outbreak of a disease that would kill 600 people.

Group one was shown two possible remedies:

If Program A was implemented, 200 people would be saved.

With Program B, there was a 1/3 probability that 600 people would be saved, and a 2/3 chance that everyone would die.

However, the questions were framed differently for Group two.

With Program C, 400 people would die.

With Program D, there is a 1/3 probability that nobody will die, and a 2/3 chance that 600 would die.

“But, Adi, what was the point of telling us this?”

You see, my dear readers, the respondents voted for options that were framed to make them appear as if they were saving lives. All your options naturally saved some lives, but when you read the above, which one feels less death-y, and more “Yay, life!"

72% of participants voted for Program A, and 78% for Program D. This was because they’re loss averse.

“So, loss aversion, sunk-cost fallacy, social pressures, confirmation bias, and overconfidence can cause continuation bias? I may as well curl up into a ball and start hibernating because there’s simply no way I can avoid it.”

See, that’s where you’re wrong. But before we get into the solutions, let’s take a look at some examples. You need to know what you’re looking out for, after all.

[2. Examples]

"Adi, after you’ve given me the biggest existential crisis of my life, you better give me some good examples.”

Okay, okay, let’s talk about some relatable ones, shall we?

[2.1 Everyday Decision Making]

Remember my friend Billy? Yes, that Billy, who was the poster-boy for action bias.

You see, Billy works at a quaint little grocery store. Business is slow, and his manager, Jerry, (imagine the most vile person you can think of and why did you think of your in laws?) is pressurising Billy to grow his business. The Joker to Billy’s Batman.

Hence, Billy starts a buy-one-get-one-free campaign on packets of carrot sticks. But this doesn’t change much for Billy’s store. Demand is still low, and now they make a loss with the sale of each carrot stick.

Surely Billy should change his strategy now, right?

But Billy doesn’t. Billy’s worried. Billy sticks to the plan, fearing that changing it, even for the better, would admit a loss and show weakness. He’s worried that this will make him look even worse in front of Jerry.

So he sticks to the plan, and the store eventually shuts down due to an invasion of rabbits that caught a glimpse of the free carrots.

See what I’m getting at? Maybe another example will help.

Imagine you’re investing in the stock market and see a great investment opportunity. Naturally, you invest in the stock (think of the growth potential!). But then, something changes. The value of the stock falls, and you have to decide whether or not you hold the stock, in hope of the market rebounding.

So, you sit there. You sit there, and thoughts swirl around in your head. “Loss aversion. Sunk-cost fallacy. Overconfidence (my plan is good, trust me!). Society will see this as a sign of weakness. What of the opportunity cost?”

All the above thoughts coerce you into holding this stock. Coerce you into your original plan, even when there’s clearly new evidence to suggest doing otherwise.

The above two examples are exactly what continuation bias is. Succumbing to its many causes, you continue on with your original plan, even though all evidence suggested doing otherwise. The reason you’re not able to adapt and evolve. The reason pilots land their plane in dangerous weather, leading to numerous plane crashes.

[2.2 Businesses]

It’s the same with businesses. Just as we continue holding on to a failing stock, businesses may hold onto failing business strategies.

Think of Blockbuster. Ahh, the nostalgia. The brick-and-mortar, the rental CDs, and a time before all this pesky new technology.

And then came along Netflix. Blockbuster did attempt to adapt, of course, as they saw what Netflix was building toward. However, a majority of their funds went into developing what made Blockbuster - the brick-and-mortar physical stores - Blockbuster.

Continuation and overconfidence bias eventually led to Blockbuster’s demise as they rejected an offer to buy Netflix.

Even Blackberry. At one point, Blackberry held 50% of the U.S. mobile smartphone market. However, their resistance to touchscreen phones, instead deciding to stick with the classic keypad/small screen design, led to Blackberry’s demise.

Hence, people left one fruit for the other, and now are in love with Apple. Steve Jobs really missed a trick by not calling it Blueberry, didn’t he?

So just as we hold on to our stocks hoping for an upturn, businesses hold onto their technologies, their marketing strategies, their business models, as that is what made them successful. They believe that is what will make them successful again.

Of course, you shouldn’t always deviate away from your business’ core philosophy - that’s what makes your business, your business. But you should be open to it, at least.

[2.3 Football]

Just for today, you are Pep Guardiola. Surprise! You've lost all your hair.

You're loving life, playing in a system where both your full-backs get high and wide to hold the width. But you want something more. You want your right-back to invert into the midfield. So, you implement this system. It's now your go-to.

But what's this? Lo and behold, Joao Cancelo's back at Manchester City. So, you force him into that RB position, even when it simply makes no sense.

But you know what would've made sense? Joao Cancelo holding the width down the right. It would've been perfect.

However, you stick to your inverted right-back plan and refuse to deviate. You'd have to cut your losses and admit any Cancelo wrongdoings, after all.

You know that, objectively, using Cancelo to hold the width was the correct decision, but you can't bring yourself to do it. Whether it's pressure from the fans, blind optimism, or sunk-cost fallacy, you stick to your original plan and fall victim to continuation bias.

Seeing that continuation bias in football can also go the other way (instead of buying different players to accommodate a new system, you change the system to avoid deviating from the players you've bought), it can be quite potent.

Especially when you reach the top-flight, where it's a game of small margins. Small margins that explode into epic proportions.

[2.4 Fantasy Premier League]

“I’m Wildcarding in GW 19,” you think, “We’re going to have a double gameweek in gameweek 20 after all!”

And the weeks pass by. Your hair grows raggedy, your kids grow older, learning to take their first steps and walking out of your house as all you do is spend days waiting for a DGW 20 announcement. “I need to Wildcard!”

Another week passes by. You’ve not left your house in five weeks, and your rent is unpaid. Your landlord is forcing you out. “But, my wildcard!”

Time passes by, and it’s evident that there is going to be no DGW 20. But you wildcard in GW 19 anyway because that was your original plan. You bleed incredible amounts of EV and get 19 red arrows in a row.

This is the potency of continuation bias in FPL. Despite all the new information you get, you don’t restructure your original plans.

Why? Overconfidence in your original plan. Fear of FPLMaster123 on Twitter calling you out for “poor decision-making.” Laziness, even. And your results are proportionately worse off than if you’d managed to put loss aversion behind you.

Continuation bias doesn’t necessarily have to be something of the same magnitude as a Wildcard. It can even be something as common as transferring a player out.

Say you plan to sell Bruno Fernandes in GW 10 because his fixtures get ridiculously hard from then on. And between GW 5-10, his fixtures are average. In fact, they’re pretty decent. But his underlyings are poor. He’s been taken off penalties and set-pieces, and now plays as deep as a 6. But you keep him. You hold him, hoping for something that he doesn’t have anymore, living with the ghosts of the past.

And he blanks in all four of those weeks. The data pointed to it, but you refused to accept it.

And that, dear reader, is continuation bias.

[3. Solutions]

Okay, let’s fix the aforementioned existential crisis now, shall we?

Firstly, simply being aware of continuation bias is a step in the right direction. So pat yourself on the back; you're doing a good job!

The next step is to reflect. Reflect upon your decisions while considering any new information, and see if your choices align with what you want your future to look like.

Take advice from other people, but of course, separate your own opinion from theirs before doing so.

Aristotle said:

It is the mark of an educated mind to be able to entertain a thought without accepting it.

So, seek out these perspectives and gain a broader understanding of the predicament you find yourself in. But know where you stand.

That said, knowing where you stand isn’t enough. Embrace change. Embrace the possibility of being wrong, and work on the solution. Frankly, no one cares about your mistake as much as you do, and if you rectify your mistake—if you get to your solution—people will start caring.

Take risks. Yes, opportunity costs and losses of utility will hurt, but you won’t know what you can achieve until you take that risk. $0.05 is ultimately just $0.05; the utility is what you make of it.

Be objective. Of course, let emotions play a part in your decision-making, but being able to rationalize and separate objectivity and subjectivity will make your thought process that much clearer.

[4. Conclusion]

Does this mean that you should always change your plans?

No, not necessarily. Your plans could be right. But they could also be wrong.

Identifying and working on them, even if it means completely restructuring them, can yield proportionately better results.

This distinction is key.

Even if it means changing years of work.

This article does not just tell you why your impulsivity is controlling you; rather, it tells you how you can control your impulsivity to win more by doing less.

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CONTENTS

1. Definitions and Context

2. Studies

2.1 Anthony Patt and Richard Zeckhauser

3. Examples

3.1 Everyday Decision Making

3.2 Businesses

3.3 Economics

3.4 Football

3.5 Fantasy Premier League (FPL)

4. Conclusion

[1. Definitions and Context]

Simply put, action bias describes the human tendency to favour action over inaction. Behavioural economics believes this tendency stems from the human need for control.

In order to gain control of a situation, we act on impulse, thinking that we have found the solution to our issues.

Imagine this: You’re sitting by your laptop when you notice that the screen is blank. Nothing’s working. “Oh no,” you think, and you start panicking as you wildly click on buttons. “Maybe the space bar will work? Maybe escape?” even if you have no logical reason to think so.

We’ve all been here; we’ve all wanted to control this situation of uncertainty by exerting, what we think is, control over it.

However, actions do not always help the situations we find ourselves in. And this is the magic (or downfall) of action bias.

There are many reasons for our susceptibility to action bias. Take, for example, societal norms.

We may do something for others or act in a way we believe others expect, even if it's not statistically or instinctively correct.

Let’s talk about instant gratification. Who do you think society will applaud more in the moment: an instant unethical millionaire or a self-made, honest, hard-working millionaire who has made their money over a decade?

As long as their unethical ways are not overly apparent, it’s always the instant millionaire, for better or worse.

Such irrational worries about what others will think of you—something that is ultimately outside of your control—may lead you to take action that sacrifices long-term success for short-term success. Why? For a fleeting moment of approval from society before they move onto the next person.

But that's not all. Look at the presence of action bias in overconfident individuals.

Let’s look back at the computer example. If a first-year, ultimately clueless in the grand scheme of things, computer science undergrad student sees that their computer isn’t responding, they may think it’s a menial issue. “I’m getting a degree for working with computers after all!” They may be more susceptible to the overpressing of buttons, simply because they believe in their own ability to make the 'right' decision.

Of course, the opposite applies as well. If you have low self-confidence, you may not take action when needed, which opens its own can of worms.

“But Adi, you’ve told us about how we wish for control and not why. You’ve also given me a mild existential crisis, but I forgive you.”

So where does this desire for action and control stem from?

We inherently believe that doing something is always better than doing nothing. We believe that our failures, if they were to occur, would be less harshly judged if people thought we had made an effort to rectify the situation. If the instant millionaire tried one last get-rich-quick scheme to get to a million dollars, he would be applauded for his efforts. Meanwhile, the decade-long millionaire does not take action because he knows that the issue will rectify itself, and society chases after him with their pitchforks.

Is that “right”? No. Is it what is likely to happen? Unfortunately, yes.

Often, taking action is what makes rectifying the situation an even harder task.

To sum up what I mean, think of inaction as anticipated regret. People worry that the regret resulting from inaction, which leads to a negative outcome, might be greater than the regret stemming from taking action, even if the action leads to a proportionately more negative outcome.

[2.1 Anthony Patt and Richard Zeckhauser]

The paper I will refer to was authored by Anthony Patt, an environmental scientist, and Richard Zeckhauser, an economist, representing two closely related fields at the core of the paper's subject matter.

Patt and Zeckhauser examined the bias exhibited by policymakers and individuals, favoring immediate action to address environmental issues. This initial statement might seem broad, but they followed it with the observation that, in many cases, delaying decisions to gather more information would have been more effective.

Funnily enough, this was one of the rare cases wherein a policymaker actually made a decision, but they should have held back. The pressures of expectations mounted on them, perhaps?

They also discussed how politicians often prioritise flashy legislation over more effective alternatives to gain attention. This practice makes it seem like significant action is being taken when, in reality, the return on investment is minimal.

City A may benefit from covering up potholes in Region B, but Region B doesn’t get the same attention as Region C. “Let’s fix the potholes in Region C!”

In such cases, we tend to perceive any action as positive, leading to praise for often meaningless actions without substantial progress.

[3.1 Everyday Decision Making]

“But Adi, now that we know what action bias is and why we shouldn’t repeatedly yell and break our laptop trying to fix it, where else do we see action bias?”

That is an excellent question. Let me answer with a story of my friend. Let’s call him Billy.

Billy went grocery shopping, intending to shop for the week. He picked up all his groceries and walked over to the checkout aisle. As he stood there, waiting for the person in front of him to finish, he noticed a chocolate bar to his left. "It costs just $2," he thought. “I’m never going to see the result of saving this anyway; I may as well buy it.”

Billy has unfortunately fallen victim to action bias. You see, it was easier for Billy to see the short-term cost of purchasing the chocolate than what saving $2 could lead to.

Billy did not walk into the shop expecting to buy that bar of chocolate, but seeing its low price and his natural craving for chocolate, he did. Even if he did not want to.

Here’s another example. And I’m sorry, Billy, it’s about you again.

So Billy ate his chocolate. Unfortunately, eating it made him feel sick, so he did the natural thing and went to the doctor. He incessantly complained, going on and on about how sick he felt. Now, the doctor did not think that there was a major issue, and deep down, he wanted Billy to go home and come back the next day to see if anything developed.

“But it feels wrong sending Billy away with him complaining like this,” thinks the doctor. “Let me give him a prescription of x medicine instead; it’s quite mild anyway.”

You see, just as inaction can be considered to be anticipated regret, it can also be interpreted as not caring. And when you’re a doctor? That is a major red flag. So in order to take action, to make Billy think he will feel better, and to make himself feel better, the doctor prescribes a medicine to Billy that he may not have needed.

[3.2 Businesses]

Just as Billy did not properly weigh up the short-term vs. long-term effects of buying that chocolate bar, businesses sometimes prioritise quick fixes to address their issues without analysing why the issue came up or whether a long-term fix would be more sustainable.

Take Business A. Business A is well-reputed and is a large producer in Country B. Unfortunately, Business A has seen a dip in quality, and doesn’t know why. Hence, they decide to simply increase production, hoping that an increased output will compensate for the reduced quality. The defective products can eventually be thrown out, after all.

Where it would have been more sustainable to analyse why there were quality issues, Business A simply papered over the cracks. It’s similar to the instant gratification example; however, this is a large business making an equally large mistake.

Would the short-term sacrifice have been worth it in favour of improving quality in the long run? In most cases, it would. It’s just hard to see that.

For a more human-centric example, let’s take a look at meetings. Say Business A has found itself in another crisis: someone is stealing the company’s toilet paper. A travesty, I know.

To counter this, Business A has offered a reward for whoever confesses to the crime. In this manner, they believe that the situation will ultimately resolve itself.

But Business A is jittery. It loves its toilet paper. So, to stop the thief, they hold meetings after meetings to discuss what could be done to find the thief.

CCTV with night vision to find a toilet paper thief, really? Meeting after meeting goes by, and they do not find a ‘eureka!’ moment, only hours of wasted time and opportunity cost. Eventually, the thief confesses and takes his reward.

See what I’m getting at here? Business A didn’t have to take further action for the thief to confess; their original system would have done the trick, and they knew it. But they could not stand the perceived regret of inaction and held meeting after meeting, even though it was pointless.

In an attempt to avoid perceived regret, they increased their opportunity cost and, in hindsight, their actual regret.

[3.3 Economics]

The same concepts can be applied to economics. This example is slightly extreme, but a slightly watered-down version is quite perceivable.

Let’s say Country A’s job market is extremely volatile. When you look up “Country A” online, all you get is a link to Merriam-Webster’s definition of “unemployment.” And the next day, the same link takes you to "employment." That unstable.

The central bank is naturally worried, so it decides to implement a monetary policy, specifically by adjusting interest rates. When there’s high unemployment, the central bank may decide to lower interest rates. If the interest rates are low, the opportunity cost of saving proportionately rises, so businesses may as well invest that money, right? So employment rises.

But the central bank is jittery. They cannot stop adjusting interest rates. So they do it once. And twice. And, oh my god, they've changed the interest rate more often than a teenage girl deciding her Starbucks order.

This tendency for action may not result in a positive outcome; instead, it’s likelier to make Country A’s job market even more volatile. Interest rates change frequently, but beyond a point, they may become excessive and even cause other issues—economic uncertainty reducing spending, thereby conflicting with the interest rates, anyone?

But it’s not just the big financial institutions that are susceptible to action bias in this context. Even you and I are. In fact, we’ve probably fallen for the following example:

Imagine this: You’re loving your best life in Country A. The sun is shining, the birds are chirping, and the economy is booming. Yay, economic growth! So you decide to spend your hard-earned income—life is good.

You’ve maximised your utility in the short term, but as the excitement of short-term spending passes you by, you realise that you haven’t considered what happens in the long term. Will the economy remain stable? Will your job, hence your income, remain liveable?

Our tendency to take action may sometimes override our perception of what we cannot see, such as what happens in the long run.

[3.4 Football]

For the first part of this section, I will be referring to pp. 606-621 of “The Journal of Economic Psychology,” particularly, Action bias among elite soccer goalkeepers: The case of penalty kicks (2005).

286 penalty kicks were analysed from all the top leagues. Based on its probability distribution, it was found that the optimal strategy for goalkeepers were to stay in the middle of the goal, i.e. not to move.

Surprising, I know. But this is exactly what action bias is.

Norm theory (Kahneman and Miller, 1986) say that when a goal is scored following inaction, the goalkeeper feels worse than they would have, had they moved.

It makes sense right? Just picture yourself standing in front of goal, trying to save Erling Haaland’s penalty in the 95th minute. He steps up, and he scores! But wait, you just stood there looking clueless?

It’s only natural for the (somewhat) irrational worry of embarrassment to consume you, but should it dictate your actions?

It’s the same with defensive actions. Defenders may succumb to action bias (or just plain old violence) by stepping out and attempting a tackle. Its adverse effects may be mitigated in possession, but outside of it, you simply leave yourself vulnerable to counter attacks.

Managers aren’t exempt to action bias either. Imagine yourself to be… let’s say Pep Guardiola. You tap your head and realise you have no hair left! But you’re also 1-1 in the 89th minute and you’re chasing a goal. You abandon your possession based system and 3-2 buildup, instead you push everyone forward. You’ve gone from a 3-2-4-1 to a 1-2-7 faster than a blink of an eye.

Now, City have enough quality to overpower most other teams. There is a lot of pressure on the defending team when they’re desperately trying to park the bus. Of course, it makes sense for you to increase the tempo, but to drift away entirely from a solid game plan? To make two substitutions just because you’re chasing even if they’re not to the benefit of the team?

Hello, action bias.

[3.5 Fantasy Premier League]

Just as Billy overvalued short-term gains with his chocolate bars, FPL managers often do the same with transfers. Yes, you may gain some short-term EV, but how does this affect you in the long run?

Once again, the following example is slightly extreme, but it’s worth considering at least. You look at your bus team, and you’re satisfied with it.

“I’m getting a green arrow, for sure!” you think, unaware that green arrows are but a myth.

It gets closer and closer to the deadline, and you’re still happy with your team. But wait. What’s that? You have two free transfers?!

"Well, I have to use one; imagine burning a transfer!” you say exclamatorily. So you do. You make a transfer, and contentedly, you step away from FPL for the weekend.

It’s now Monday, your kids are crying, your dog is barking, and someone is trying to rob you as you walk on the street as you check how your FPL team did. We all have our priorities, after all.

You stop. The robber stops. You yell. The robber cowers.

“The player I bought blanked, and the player I sold hauled?! Blasphemy!”

Sometimes, burning a transfer can be optimal. Is it unlikely? Sure. Does it hurt your short-term EV? Probably. But there are times it may come up, and it’s best to know to avoid a similar scenario.

The same concept can be applied to captains and vice-captains. If you don’t change anything from your bus team, you may be tempted to simply swap around your captain or vice captain just to feel like you’ve done something. Action to avoid perceived regret, after all.

[4. Conclusion]

Does this mean action is entirely fallible and it’s best to avoid any form of action? No, of course not. Action is still (and will always be) a good thing, necessitating hard work and dedication.

It’s simply best to know about the concept of action bias and how it could affect us. Distinguishing whether a reaction is needed following an action requires inquisitive and logical thinking, such that you can get close to the best possible outcome.

Even if that includes doing nothing.

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CONTENTS

1. Definitions and Context

2. EXAMPLES

2.1 Everyday Decision Making

2.11 Consumer Purchases

2.12 Diets

2.13 Hobbies

2.14 Relationships

2.2 Business

2.21 Chasing Trends

2.22 Neglecting Philosophies

2.23 High Employee Turnover

2.3 Football

2.31 Transfer Windows

2.32 Frequent Managerial Changes

2.33 Tactical Instability

2.4 FPL

2.41 Points Chasing

2.42 Emphasising on One Gameweek

2.43 Constantly Changing Strategies

3. CONCLUSION

[1. Definitions and Context]

Anne-Laure Le Cunff, a PhD researcher studying the Neuroscience of Education at King’s College London, defines the shiny toy syndrome as “[the feeling that] is characterised by wanting to own the latest toy and getting an intense but temporary sensation of happiness from the ownership before moving onto something else.”

We've all been there, haven't we? As children, we often believed that purchasing a new toy car would bring us happiness, and we would find ourselves caught in a loop, buying one toy car after another. Even entrepreneurs can fall prey to this syndrome; while our susceptibility might have been to acquiring new toy cars, theirs may have been to developing new technologies simply because they find it fun and innovative, regardless of its practical applicability.

Humans are never truly satisfied, for better or worse. Our needs will always surpass our wants, and this demand is impossible to fulfill due to the economic concept of scarcity, where demand exceeds supply.

Hence the term 'shiny toy.' This belief is rooted in the childhood phenomenon that we've all experienced at least once: the desire to purchase a new toy, even if the one we have is perfectly fine.

The below has been taken from an article by Michael Whitehouse, and I think it sums up this phenomenon succinctly.

It’s why we start strategies we’ll never finish. It’s why we feel like we’re running in place. Shiny Object Syndrome is what happens when we are always chasing the new shiny thing.

Such examples will be expanded upon in Section 2.

[2. Examples]

As I've mentioned before, the reason I started this series of introspective posts is to raise people's awareness of their decision-making processes and demonstrate how to reduce the obstacles they may encounter on the path to a decision with a favorable outcome. To achieve this, I believe people need to gain a better understanding of themselves and the subconscious actions that influence their decisions. To further illustrate this, I will show you the effects of the Shiny Toy Syndrome by highlighting instances where you may have recently been affected by it.

[2.1 Everyday Decision Making]

To simplify this section, I've divided it into four main subsections: consumer purchases, diets, hobbies, and relationships. This approach allows me to cover a wide range of human experiences, from intrinsic feelings to societal perspectives.

[2.11 Consumer Purchases]

This essentially echoes the toy car example I mentioned in the introduction – the tendency to purchase new items, like a new phone, even when our current one would have sufficed for our needs. The desire for something novel and the associated joy often overrides the logic we could have otherwise exercised.

[2.12 Diets]

Every day, I wake up to new diets being mentioned on the internet. 'Do this,' 'do that,' 'cut out carbs,' and you'll be fit in no time! In reality, we become enticed by the potential results and the marketing of these diets, leading us to constantly chase after new and more exciting diets in pursuit of our fitness goals. Instead, if we find one that we believe suits us and commit to following it to the best of our abilities, we can make much more progress in our quest for improved health.

[2.13 Hobbies]

As the world has become increasingly interconnected and interdependent, our attention spans have decreased due to our pursuit of immediate gratification. If we don't see tangible results after a short period of effort, we often ask ourselves why we should continue. We quickly abandon hobbies in favor of new ones, believing that the new one will either provide immediate satisfaction or that simply taking it up will make us happier, regardless of our expectations of success. While this may sound appealing, it is often more beneficial to stick with our original hobby and find happiness within it, unless it genuinely makes us unhappy, of course.

[2.14 Relationships]

Some people incessantly seek new relationships and friendships, chasing the happiness linked to finding new partners or friends, often neglecting the development of existing ones. This pursuit can result in a lack of meaningful connections that would ultimately outweigh the temporary happiness of a newfound relationship.

[2.2 Business]

In this subsection, I will primarily cover three aspects: the pursuit of growth, the loss of meaning within the business, and the human element.

[2.21 Chasing Trends]

If a business constantly changes its strategy in the blind hope of discovering a market gap, driven solely by optimism rather than a logical assessment of the business environment, it may struggle to build and maintain loyalty with new customers and to establish a consistent brand identity. This is similar to the point about relationships in subsection 2.14.

[2.22 Neglecting Philosophies]

In an ideal world, every business is founded on a core philosophy that makes it unique, and this philosophy ideally resonates with its customers. However, when businesses heavily invest in areas that diverge from their core values, they end up diluting their focus. While this may lead to temporary success in a new market, it can hinder long-term growth and dilute market share in their original market.

[2.23 High Employee Turnover]

This point is connected to subsection 2.22, which discusses neglecting philosophies. All of the following points are diversions from that central concept. Businesses may frequently hire new employees for short-term satisfaction, which can obscure a lack of essential skills. Moreover, constantly changing and diversifying core philosophies can result in overall employee dissatisfaction, leading to employees leaving or being laid off, resulting in unnecessary time and resource wastage.

[2.3 Football]

Football is a sport where fine margins can quickly escalate into epic proportions. When the margins are so thin, clubs must seek any edge they can find. However, in their pursuit, clubs often cross these delicate lines, resulting in unfavorable outcomes. I will focus on such examples that harm clubs in both the short and long run.

[2.31 Transfer Windows]

This example closely resembles the toy car analogy I introduced earlier. Clubs often chase after the best talent or players that money can buy while overlooking the talent they already have. A case in point is Chelsea under Todd Boehly's ownership. They have successfully acquired top talents like Kendra Paez, Angelo, Deivid Washington, and more. However, this approach comes at a cost. Apart from the financial aspect, Chelsea has also lost players like Lewis Hall. While many of Chelsea's signings have potential and high ceilings, this strategy is inherently risky, and most signings end up being profit-maximizing deals. Essentially, the ROI comes through financial gains rather than on-field performances, and the opportunity cost is substantial.

In fact, take a look at what Ange Postecoglou had to say on the matter (via the BBC).

I've always said I've never felt it is about just spending money.

It's about having a squad that's balanced, guys that are committed to a cause. Having guys that maybe aren't going to play every game, but every time they play they are going to make a huge impact for you because they buy into what you are trying to build.

The answer is to get the right chemistry in your team.

It’s important not to abandon your core philosophies in pursuit of something that may never come to fruition.

[2.32 Frequent Managerial Changes]

Clubs frequently hire and fire managers prematurely, prioritizing immediate success over stability and continuity. This behavior is a direct consequence of the Shiny Toy Syndrome. For instance, Watford has had 10 new managers since 2020 alone, reflecting a lack of stability, which is closely related to the high employee turnover mentioned in subsection 2.23. I'm a strong advocate for 'trusting the process' and relying on 'project managers' because I believe it's how a club can develop or rebuild their footballing philosophy. While this approach may not be applicable in all situations, I believe it's the right mindset to adopt when there's a lack of progress.

[2.33 Tactical Instability]

Managers can often be drawn into experimenting with or sticking to tactics that don't truly suit their club, simply because they are trendy or popular in global football. The allure of Pep Guardiola's 3-2-2-3 formation, for instance, was hard to resist. However, football isn't a one-size-fits-all sport. Frequent changes in the team's approach without allowing players time to adapt, learn, and improve can lead to short-term performance declines and decreased squad morale. When this process is data-driven and consistently applied over time, positive results should follow.

[2.4 FPL]

FPL often involves simple and avoidable mistakes that seem more significant due to the game's inherent luck and variance. Despite our lack of control over outcomes, we tend to second-guess our thought process. In this section, I will discuss three commonly overlooked FPL mistakes, often seen as having high upside, but which can also carry significant downsides.

[2.41 Points Chasing]

Past points do not guarantee future points. Just because Player A scored a hat trick and earned 17 points in GW 3 doesn't mean he will do the same in GW 4. When we witness a player's outstanding performance, we may be tempted to acquire them, hoping for a repeat, driven by the happiness of wishful thinking. In reality, we should consider statistics or the 'eye test' – did something change in the team's system that led to Player A's hat trick? Fixture difficulty should also be factored in; if the hat trick was against weaker opponents and the next match is against tougher ones, there is no guarantee of similar success. Just as we want the next toy car, we also want the next asset. Rather than chasing past points, it's better to focus on where the next source of points may come from. There are, of course, exceptions to this approach – for example, since Son Heung-min started playing as a 9, his value as an asset dramatically increased.

[2.42 Emphasising on One Gameweek]

Say, as an example, Player A faces SHU, MCI, ARS in his next three matches. The temptation to buy him is high, especially when he's up against the worst defense in the Premier League in the next match. We often fall into these traps because we're eager to enjoy the excitement of acquiring a new asset without considering the long-term implications. He might be great for this week, but what about the future? Are you willing to keep him? The opposite also holds true. If he played MCI, SHU, LUT, we might focus too much on the difficulty of the first fixture and overlook the favorable fixtures that follow.

[2.43 Constantly Changing Strategies]

I remember wanting to use my wildcard one week simply because I wanted to overhaul my team. It wasn't a necessity; I just wanted new assets in my squad. This inclination is especially common after weeks where our performance hasn't been great, leading us to believe our team is subpar. However, that's often not the case, as FPL is a game with high variance. This behavior doesn't just apply to wildcards; it can also be seen in simple transfers. Action bias and the Shiny Toy Syndrome drive us to seek immediate satisfaction rather than maintaining a long-term, sustainable outlook.

[3. Conclusion]

I believe that simply being aware of the Shiny Toy Syndrome can help us avoid falling into its trap. When facing this issue, frame it in an easy-to-understand manner, allowing you to view it from an unbiased, third-person perspective and separate preconceived biases from a logical approach. Define both your short-term and long-term goals, ensuring that you don't sacrifice one for the other. Prioritize tasks on your to-do list in alignment with your goals and avoid always seeking immediate gratification. Additionally, self-discipline and patience go hand in hand with these principles.

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CONTENTS

1. Definitions and Context

2. Examples

2.1 Everyday Decision Making

2.2 Business

2.3 Football

2.4 FPL

3. Causes

3.1 Loss Aversion

3.2 Framing Effect

3.3 Commitment Bias

3.4 Waste Avoidance

3.5 Personal Responsibility

3.6 Optimism Bias

4. Conclusion

[1. Definitions and Context]

The Sunk Cost Fallacy describes the tendency to follow through on a task, whether or not the current costs outweigh the benefits, due to the time, money, or effort invested in it.

Where do the words “Sunk Cost” really come from? Investopedia defines the term as, “A sunk cost refers to money that has already been spent and cannot be recovered.” We know that humans are inherently, or attempt to be, rational in nature, yet simple cognitive biases often throw us off our stride and into a different path. If one (or a business) was rational when making a decision, they’d be able to separate a change in the potential benefits (revenue, hence profit) from the sunk costs that one has incurred. If one were truly rational, such a fallacy would not be factored into one’s thinking.

If you’ve read some of my previous pieces, such as this one on The Availability Heuristic, you’d know how much I appreciate Daniel Kahnemen’s thinking and logical reasoning. So who better to tell you about this fallacy than himself?

The sunk-cost fallacy keeps people for too long in poor jobs, unhappy marriages, and unpromising research projects. - Daniel Kahnemen

Such examples will be expanded upon in Section 2.

[2. Examples]

The reason I started this series of introspective posts is to make people more aware of their decision-making and show them how to reduce the obstacles that they’d face en route to a decision that is more likely to have a favourable outcome. What better way to do so than by showing you where you may have been affected by the sunk cost fallacy recently?

[2.1. Everyday Decision Making]

Imagine that you’re going back to school. You’ve spent years dreaming of majoring in science, but after two classes you realise that you cannot get through only by knowing s = ut +0.5 (gt^2). As a direct consequence of the sunk cost fallacy, we’d commit to this path as we have spent time and effort deciding to major in science. Will we be happy through this process? It’s not likely. If we were perfectly rational, we’d only evaluate what courses we could take up in the future, rather than look back at the past.

Perhaps this is too niche an example; I get that. Think of cinemas; that's an example we could all relate to. Cinemas are getting more and more expensive by the day, don’t you think? Say you’ve spent $50 on a ticket, and the movie turns out to be terrible. Well, because of the sunk cost fallacy, you’re likely to watch the movie through so as to fulfil the price of the tickets. In some ways, this is ironic, I suppose, as the additional 1.5 hours you spent on it may have led to a more than meaningful opportunity cost. If we were rational, we’d pick up our popcorn and walk off during the interval. So simple, yet so hard to do.

[2.2. Business]

Marketing is often seen as a “relatable” aspect of production. After all, it aims to appeal to you, the consumer. You’ve recently started a new streaming platform, and naturally, you want to market it. After all, you need publicity to drive demand. Hence, if you spend $10,000, you’re confident after all. As soon as this $10,000 is spent, it’s a sunk cost. The money is gone, and the investment has been made. All you can do is not factor it into any additional investments you make in the matter.

In a series of experiments undertaken by Dr. Rebecca Bevans, researchers set out to see how investments are honoured when they involve the money of a third person. In one of these experiments, people were asked to eat cake until they were full. Like all good experiments, however, there was an obvious caveat. Some were told that the cake was purchased from a local bakery (on sale, of course), while others were told that it was expensive and that it was sourced from an area that was an hour away (think of the fuel costs!). They were then asked to imagine two scenarios: one in which they bought the cake themselves and the other in which someone else bought it for them. The results showed that people eating the more expensive cake were more likely to continue eating the cake irrespective of who bought it, demonstrating the interpersonal dimension of this effect. When you make business deals, the sums are likely to be relative or absolutely large, meaning the tendency to fall into this effect may be proportionately large—something that has to be avoided. Taking practical every-day applications of this fallacy and applying it to the context of a business is pivotal for success; being self-aware is an essential quality for all entrepreneurs.

[2.3. Football]

Football is a game of tight margins that explode into epic proportions. The example I’m about to give is one of the more extreme ones, and in an alternate reality, the fallacy would not have led to the conclusion it did, and it may possibly have been reversed (which wasn't the case in reality). 

Reports have emerged that Roy Hodgson signed Jordan Ayew over Erling Haaland in 2018. Is it hindsight bias to critique this decision? Not entirely; Haaland’s explosion was foreseeable. That said, Ayew was in good form at Swansea, and Haaland was a raw, lanky, untested 17-year-old playing at Molde. Hodgson said the following:

(Haaland’s) not physical enough for the Premier League

To say this outright and to have the will to reverse it may be tough; we all have an ego, after all. In a world where it were possible, Hodgson may have been able to accept his mistake, understand that he’s lost money on Ayew, and spend an additional £5–10 million on Haaland. The money has been spent; after all, all Hodgson could do was reevaluate and look towards the future.

In fact, Junru Lyu, at the Department of Economics at UC Berkeley has written an excellent analysis on Sunk Cost Fallacy and Recency Bias Using Transfer Fee and I strongly urge you to read this. I have also covered the recency bias aspect of football in my piece on The Availability Heuristic, which touches on another aspect of human psychology.

This piece coincided with my own thoughts when it comes to minutes and transfer fees. In our minds, and undoubtedly in the minds of many managers, a higher transfer fee warrants more playing time, especially early on in the season. You’ve spent millions of the king’s finest; you may as well put it to use, right? Hence, we can see a clear and obvious positive correlation. In a rational world, we’d be able to put this aside and move on. Perhaps the player that was benched as a result of the new signing is still at the club; why not give them their fair share of minutes? Such gaps in rationale should not affect those in the high echelons of sport, at least not as easily as they do for you and me.

[2.4 FPL]

Last season was an odd FPL season for me—the season before I fully committed to the analytical way of playing the game. It was around GW 25, and I was met with a dilemma. I had to get rid of one of my forwards and, naturally, buy another. Here I was faced with two options: Kai Havertz and Ollie Watkins. I bought Kai Havertz with hopes of a new system and a newfound talismanic approach. It was clear that this was the wrong decision immediately, even though Havertz initially outscored Watkins. The npxG+xAG were miles apart, and Havertz was in fact not a talisman, not helped by Chelsea’s lack of cohesion, teamwork, and sense of self. Now, we were into DGW territory—a hit would not have been the worst option ever—particularly as Ollie Watkins had quite the favourable DGW. I had the FTs to make the switch, yet I didn't. I didn't want to absorb the costs of having bought Havertz already. Havertz got around 7 points in that DGW, and Watkins got 26. Is this hindsight bias? Perhaps. But I do not think I’d have made such an error if I were aware of this fallacy.

This could happen to any of us, and it’s understandable. You may have bought James Ward-Prowse as your differential, and now you refuse to sell him for Jarrod Bowen because you bought him as a differential. He’s now not playing as a 10, and the underlying data for both are realms apart. We can’t reverse the decision in the prior gameweek, but we can in this one and enjoy future points. Essentially, we have to be able to separate the acquisition costs from the decision costs, as the information value we have in both scenarios is different. The value of X may be different from Y as the GWs pass, but we must not fret over lost points.

[3. Causes]

Now that we know how we fall for the sunk-cost fallacy, let’s see why. Understanding the issue via processing it is key to resolving it, after all.

Thinking about this concept psychologically, there are six main reasons for this process leading to failure.

[3.1 Loss Aversion]

Some of us may prefer avoiding losses to taking a guaranteed win, as losses may hurt more than the respective gain would. In this case, we’d be unwilling to commit to a project with a guaranteed loss, or a project with sunk costs, for low risk tolerance, hence avoiding the project entirely. If you do still go through with the project, naturally your investment in it will increase (whether that be time or money), making the loss feel larger when you eventually walk away.

[3.2 Framing Effect]

We are our own people; that’s what makes us human. This means that our perception of an event may be vastly different from another’s, meaning we may cast something in a positive or negative light depending on what we think of it. When you combine this with loss aversion, framing an opinion negatively, such as abandoning a project, means a loss. A loss is usually associated with something negative, after all. On the other hand, continuing through with a project in the hope of success (a positive trigger word) frames our choice as success, even when it may not be.

[3.3 Commitment Bias]

This is often seen as the most simple cause of the sunk cost fallacy. We have a plan, and we stick to this plan simply because it was the original plan that we made. We initially decided on this plan; hence, we’ve stuck with it.

[3.4 Waste Avoidance]

If we stop our plan midway through, we’d be abandoning the work and resources we’ve invested in it. Humans, by nature or by upbringing, don’t want to waste, hence it’s not a desirable quality. The additional investment in preventing waste may not get us anywhere anymore, yet we'll continue to invest in it.

[3.5 Personal Responsibility]

We’ve made a decision. That decision is part of us, meaning we may become emotionally attached to the decision itself, making it harder to let go of. Personal responsibility stems from this emotional bias, blinding us to our losses.

[3.6 Optimism Bias]

Optimism is good; we can all use it in our lives. However, when we overestimate our chances for success, we may ignore the potential danger signs—the signs of an incoming loss. The hope that stems from optimism leads to further investment in resources, hence the vicious cycle.

[4. Conclusion]

The sunk cost fallacy is avoidable; all we have to do is learn about it and put our minds towards putting it behind us. Frame the problem in an easy-to-understand way; perhaps this lets you view it from a third-person POV, distinguishing preconceived biases from the truth. If you have data, trust it, look at it, and don’t shy away from it; numbers are nothing if not pure logic after all. Trust in yourself, accept the risk, and turn away from risk aversion; you’ll be in a more favourable position from where you can develop and grow.

Immanuel Kant believed that our consciousness is made up of our inner and outer selves. Bringing both together is what will help us understand reality.

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1. Definitions and Context

1.1 Behavioural Economics

1.2 Heuristic

1.3 The Availability Heuristic

2. How Heuristics Work

3. The Effects and Examples of the Availability Heuristic

4. The Availability Heuristic in Football and FPL

4.1 Football & FPL

5. Conclusion

[1. Definitions and Context]

To improve the legibility of the following definitions, I will split them up into subcategories since they can often become theoretical.

[1.1 Behavioural Economics]

Behavioral Economics is the study of psychology and its relation to the economic decision-making processes of individuals and institutions. It is often said to be intrinsically linked to normative economics, which involves ideologically prescriptive judgments rather than factual observations. Essentially, behavioral economics seeks to understand why and how people act in the real world, without relying solely on direct statistical evidence (as in positive economics).

Where Neoclassical economics posits that people have well-defined preferences and make self-interested and well-informed decisions based on these pre-existing preferences, behavioural economics analyses the mistakes we make during this decision-making process and aims to find ways to correct and avoid these errors.

Classical economists believe that people are rational beings, while behavioral economics assumes the opposite. Therefore, behavioral economics must address inconsistencies between desires and outcomes, which is highly relevant to Fantasy Premier League (FPL) and will be referenced later.

[1.2 Heuristic]

In the context of psychology, a heuristic is a mental shortcut that allows people to make judgments quickly and efficiently. This means we don't have to pause and deliberate on our next action; instead, we instinctively act based on mental cues. While heuristics can make us more efficient, there is a common belief that these mental shortcuts hinder our ability to make rational decisions because we do not carefully weigh the costs and benefits of every possible scenario. However, in practical terms, it is often not feasible to consider every possible scenario, so other factors such as intelligence and the accuracy of our perceptions also influence the decision-making process.

Simply put, heuristics stem from a need to reduce cognitive load, simplify choices and enable us to act quickly.

[1.3 The Availability Heuristic]

Building on the previously mentioned definition of a heuristic, the Availability Heuristic is a cognitive bias* where decisions are influenced by information readily recalled. Consequently, this information is mistakenly perceived as representative of more frequent or probable events. Essentially, when making a decision, individuals tend to prioritize certain pieces of information, often ones encountered recently, and overestimate the likelihood of their recurrence.

*a cognitive bias is the tendency to act in an irrational way due to limited ability to objectively process information.

[2. How Heuristics Work]

Our brain is highly adaptive and inherently eager to learn. Consequently, heuristics can only develop over time. As we make decisions and observe outcomes, our brains create narratives or frameworks that enable us to handle similar situations in the future. It's akin to anticipating a pattern and being able to solve it because we've encountered it before. Therefore, heuristics develop as a result of evolution and basic brain maturity.

However, when we recall past events, especially their outcomes, we often encounter preconceived notions. The existing framework of that experience quickly relates to the previous one, forming a new perspective on the current (similar) experience. This process provides an 'answer' to the problem or a solution without the need for unnecessary mental exertion. This phenomenon highlights a central issue that Behavioral Economics considers: the disparities between desires and outcomes. It's important to recognize that no two scenarios are exactly alike. Consequently, when attempting to solve a new problem, we are subconsciously influenced by new biases. Thus, while we may desire the same outcome as in a previous situation, we often fail to achieve it, resulting in further inconsistencies between desire and outcome due to a lack of rational thought or the influence of other heuristics, such as anchoring.

Some common examples of heuristics include:

• When you're stuck in traffic (so you decide to take a different route without knowing the way) [affect heuristic].

• Consumers often buy the same brand over and over again, even if the brand isn't what they necessarily need [familiarity heuristic].

• Basing opinions on someone due to what someone else said about them [representativeness heuristic].

• Guessing that someone who is creative or dressed colorfully is a humanities major [representativeness heuristic].

  

[3. The Effects and Examples of the Availability Heuristic]

As we know, the availability heuristic describes how certain information can carry greater weight in our thought processes, often leading to incorrect conclusions (though heuristics are still generally effective).

A common example of how we prioritize certain information is the perception of plane crashes. Many people believe that the likelihood of dying in a plane crash is much higher than in a car accident. However, the opposite is true. This can be substantiated by statistics; the probability of dying in a car accident was 1 in 107 (as of 2019), whereas there weren't enough plane crashes to draw a meaningful conclusion. In similar statistics, a person would have to take 3,678,470 flights in their lifetime to be involved in a fatal air accident. (For additional information that has not been included in this piece, click here.) This misconception can be attributed to the fact that whenever a plane crash occurs, its gravity is exemplified and vividly presented by the media. Consequently, we place greater emphasis on it than on a car accident. Perhaps it has been so normalised that it doesn't evoke the same emotional response, or maybe we perceive driving as an unavoidable scenario, hence not assigning the same weight to it.

The quote below, by Daniel Kahneman, embodies the above phenomena succinctly. He discusses heuristics further in his book, “Thinking, Fast and Slow.”

Even the lottery. Many of us label it as a scam, but have we considered just how deep the rabbit hole goes? The probability of winning the Powerball Jackpot of $1.58 billion was 1 in 300 million (Victor, 2016). However, the image of success, and the people who have achieved it, firmly embeds itself in our minds, causing us to subconsciously overestimate our chances of winning the lottery.

Our susceptibility to the availability heuristic can be intrinsically linked to our sense of self too. For an explanation, I will briefly summarise a study done in 1991.

[Schwarz, N., Bless, H., Strack, F., Klumpp, G., Rittenauer-Schatka, H., & Simons, A. (1991). Ease of retrieval as information: Another look at the availability heuristic. Journal of Personality and Social Psychology, 61(2), 195–202.]

Essentially, the ease with which people can recall information has implications for what they actually recall. In this study, subjects were divided into two groups. One group had to list 6 examples of assertive behavior, and the second group had to list 12. After completing this task, they had to rate how assertive they perceived themselves to be based on their answers. Both groups finished listing their examples; however, those who had to list only six examples rated themselves as significantly more assertive. This was because listing six examples was perceived as an easier task in relative terms, leading the participants to correlate their answers with more assertive behavior. The opposite applied to the group listing 12 examples, which was perceived as a relatively tougher task, resulting in them rating themselves as less assertive. This study demonstrates that, intrinsically, availability heuristics and biases operate based on the ease of recall rather than the content itself. After all, this is what the participants used to rate themselves.

[4. Football]

I will merge the football and FPL sections because I believe that a deeper understanding of football, combined with comprehensive knowledge of FPL's rules, is key to success in this field. Additionally, most of the information in the FPL section will have a direct impact on football, and vice versa.

[4.1 Football]

For this sub-section, we will focus on outcome availability bias because, from my personal experience, I have seen it occur far more often than I would've liked. Do you recall when I mentioned desired outcomes vs. results in section 1.1? Well, this plays a pivotal role here.

In layman's terms, outcome availability bias is the use of availability heuristics to judge the outcome of an event.

The example below is presented solely for illustrative purposes. Its concept holds greater significance than the example itself, as it can be applied in various contexts. Ironically, by listing this example, I am acknowledging my own susceptibility to the availability heuristic.

The above image was taken from Chelsea’s 3-0 win over Luton Town, in which Raheem Sterling scored twice and was nearly awarded an assist. His npxG+xAG was 1.07, indicating that it was also statistically a good performance. But this isn’t where Raheem Sterling's plaudits caught the attention of viewers everywhere. That happened against West Ham. Even in a loss, Sterling was the liveliest player on the pitch, successfully completing 6 (!) out of his 7 attempted dribbles.

Nonetheless, the goals came against Luton. That match occurred on the 26th of August 2023. And much to people's dismay, when the England squad was announced on the 31st of August, Raheem Sterling was not included. I'll be honest; I think Sterling has received far more hate than he deserved. That said, the uproar on social media when he wasn't called up seemed... illogical? I cannot imagine the same reaction had he not scored against Luton. Perhaps the reaction was from Chelsea fans looking for any semblance of hope or from the voice of the FPL community following his 19-pointer. Either way, the noise died down soon. Why? Eberechi Eze got 2 assists against Plymouth on the 30th of August and scored against Wolves on the 3rd of September.

Suddenly, social media was applauding his inclusion, rather than focusing on Sterling’s exclusion. To make matters worse, Sterling wasn’t called up even after Grealish pulled out of the squad.

See what I’m getting at here? Sterling’s recent performances were given much greater importance than logic should dictate. We know that Sterling is more than a capable player; we saw it at Manchester City (339 appearances, 131 goals, 95 assists). Perhaps this nostalgia, combined with the importance given to those goals, influenced our thought processes.

But this is a one-off occurrence. No harm done, right? Well, not exactly. I recently came upon this article by Nalin Rajput, and it talks about the special case of Eder. Remember that goal he scored against France in the final of the 2016 Euros? Well, that goal has weighed heavily on our minds. Before the Euros, he played for Swansea and hadn't scored in 15 appearances. But after the goal, he was bought by Lille, where he scored 26 times in 102 appearances. Not ideal for a potential world-beater, is it?

Okay, fans and scouts/analysts fall for the availability heuristic. But surely, managers don't, right? Take a gander at what Sir Alex Ferguson said on the matter:

Think of Caicedo leaving Brighton. People initially thought that Brighton would not be able to cope with the loss (although worrying about the lack of a ball-winner/capabilities in transition was justified). Brighton has still managed to do well, though. It's the same with Spurs and Kane leaving, and eventually, it will be the same with Liverpool and Salah. We fall victim to placing a greater emphasis on what a team loses when their 'best' player isn't present. Essentially, we are susceptible to the opposite of the Ewing effect. Even this is an example of placing greater emphasis on a particular notion.

Now, if this can happen to the best of the best, what chance do we FPL players have? To make matters worse, due to the nature of the game, we are very outcome-oriented, even though the outcome isn't in our hands. Ultimately, we can only make 'optimal' decisions to put ourselves in the best position to become lucky. But this is easier said than done. We constantly fall into a cycle of being susceptible to heuristics, hence falling victim to them.

Consider statistics, for example. We may focus on certain data simply because it's more easily accessible than others, and when in tandem with confirmation bias, we have an issue on our hands. It's very easy to spin a narrative to suit the limited data you have to actually support it. Furthermore, data naturally resonates trust. After all, math is objective; it can't have a bias. But when data is presented in a way to suit what the author wants it to suit, it isn't data anymore; it's a story with numbers in it.

For example, if per 90 data is easily available to you, and you're hell-bent on using it, you may apply it to a person who doesn't start often, but rather is expected to make an impact off the bench. Consider Neil Maupay. He's started once and came off the bench in the other, accumulating a total of 112 minutes. However, with this small sample size, he has the 4th highest xG/90 out of any player in the Premier League (1.16). This would be something that's easy to recall, whereas the circumstances around this number aren't as easy to remember, meaning they are forgotten, hence severely lack context.

Media coverage can also influence our FPL/football views. If everyone on Twitter (or X if you're feeling edgy) speaks very positively about a certain player as an FPL asset, we will naturally gravitate toward picking them. Tarkowski's performance in Everton's DGW in 22-23 comes to mind. He had scored a header a few GWs ago, and now his double-header included Villa and Arsenal. He's a perfectly good pick in isolation, but no one expected a clean sheet. Essentially, everyone was relying on a header. His npxG+xAG (over the season) was decent, I suppose, at 0.16/90. However, goals from set-pieces are far more random and unpredictable, especially when you weigh them against clean sheets. For most people, it was far easier to simply listen to content creators (as they provide genuinely good advice) than to check the data for themselves.

[5. Conclusion]

To conclude, simply being aware of these heuristics and biases can go a long way in life. By knowing them, you reduce the chance that your subconscious picks up on them, giving you a greater grasp of reality as you know it. Think about it. Now, you won't spend those $5 on a lottery ticket, and you won't get in a fight with the next Albert Einstein because of the color of his clothes. You can also learn the difference between outcomes and systems and learn to separate what you can and cannot control. You can exert that much more control over your life and make it your own. Take some time off, look at things from a neutral's point of view. It helps more than you think.