Outcome Bias

On July 30,1992, a Lockheed-1011 Tristar prepared for take-off from JFK airport. The first officer was at the controls. With light winds and good visibility, it looked like one among the hundreds of routine take-offs. After all, both the captain and the first officer had thousands of hours in their logbook. When the thrust levers were advanced for take-off, the airplane started accelerating gently along the runway.’ V1’- the decision speed at which the crew must either commit to take off or abort, was announced by the captain, followed by ‘Vr’-the speed at which the airplane can lift off the ground Little did the crew realize that everything was about to change. Eight seconds later the captain’s twenty years of experience was tested, at stake were the lives of 280 passengers and the crew.

Eight seconds later….

The stick shaker jolted to life, vibrating vigorously, indicating that the airplane was stalling. A very dangerous situation affecting the ability of the airplane to fly.

“You got it”, said the first officer, baffled by the situation and hands over controls of the airplane to the captain. 

Captain took over control of the airplane, his mind in disbelief. He could feel his hands clutching on to the controls trying to stop it from juddering violently. She was stalling. His heart pounding and mind racing through years of training and experience looking for a solution. The preflight checks were normal few minutes back. She had the proper attitude and the speed was correct, but the stick shaker was indicating otherwise. The choice was between taking a stalling airplane into the air and causing disaster or aborting take-off. One look at the runway indicated, maybe there was enough runway left, he was convinced the airplane would not fly safely. Survival mode kicked in, the amygdala screaming ABORT. 

He closed the thrust levers and put the airplane back on the runway, applying maximum braking and full reverse thrust. The airplane began to decelerate, but not as fast as he had expected. The brakes seemed to lose their effectiveness. With less than 1500 feet of runway left and the airplane still at 100 knots, slowing down, it was evident that the airplane would hit the barriers at the end of the runway. He turned the airplane to the left into an open area covered with grass. As the airplane departed the runway, he sensed a ‘sharp thump’, which was the collapse of the nose wheel on to the forward fuselage. By the time the airplane came to a stop, it was on fire.

Once the airplane came to a stop, the captain turned off the fuel and ignition switches. Directed the first officer to pull the handles to activate the fire extinguisher agents. Captain pickup up the public address system, steadied his voice and announced, “This is your captain, evacuate the aircraft”. He then entered the cabin to direct the evacuation along with the crew. They quickly evacuated the airplane through the most forward right and two forward left cabin exits. The other exits could not be opened during evacuation because smoke and fire were immediately outside the exits.

After all the passengers and crew have evacuated the airplane, the captain walked through the entire cabin looking for any remaining passengers before exiting the airplane himself. He did not want to leave behind a single soul, even though the airplane was now engulfed in fire.

The safety board later found that a fault in the stall warning system triggered a false alarm and concluded that the captain should have ignored it and continued take-off. However, the crew couldn’t have known it was false, as the ground test had shown normal, and their senses indicated an actual threat. The investigation, lasting over a year, reviewed an event that lasted only seconds, with all the necessary information and knowledge of the outcome. In hindsight, it was clear the captain’s decision was wrong, though 292 people were safe.

The captain decided without the advantage of knowing the outcome in advance. The investigation board revived the event with full knowledge of how it ended – a perfect set up for outcome bias or hindsight bias.

Outcome bias is a cognitive bias that refers to the tendency to judge a decision based on its outcome rather than basing it on an assessment of the quality of the decision at the time it was made.

Outcome bias can give us misguided confidence in our abilities or skills. Outcome bias affects not just accident investigations but also influences businesses and our investment choices. For example, investors making investment decisions based on past performance of the market assuming history would repeat itself. Reading a few snippets of success stories we may be tempted to invest in the stock market, expecting high returns, without gathering the full range of information required to make an informed decision. Even expert predictions have failed when tested against the unpredictable nature of the market.

 The information gap for small investors is very large to be able to reliably make predictions. Instead, a pragmatic approach to decision- making is required allowing room for unknown variables while acknowledging the limits of our foresight. Recognizing outcome bias is an important step towards better decision making.
When we evaluate decisions after the event, we are all prone to outcome bias. So, the next you meet your friend who has recently divorced, before you go- “I knew their marriage would not last”, pause. Consider, whether that truly was your prediction before their marriage or now that you know that the divorce has happened.