Narrative as Therapy for Hindsight Bias
Taleb proposes using a written narrative to soften hindsight-driven regret. Writing can help examine what was known at the time, although a coherent account does not establish that the outcome was unavoidable.
THE IDEA
If narrativity causes us to see past events as more predictable, more expected, and less random than they actually were, then we should be able to make it work for us as therapy against some of the stings of randomness.
Say some unpleasant event, such as a car accident for which you feel indirectly responsible, leaves you with a bad lingering aftertaste. You are tortured by the thought that you caused injuries to your passengers; you are continuously aware that you could have avoided the accident. Your mind keeps playing alternative scenarios branching out of a main tree: if you did not wake up three minutes later than usual, you would have avoided the car accident. It was not your intention to injure your passengers, yet your mind is inhabited with remorse and guilt. People in professions with high randomness (such as in the markets) can suffer more than their share of the toxic effect of look-back stings: I should have sold my portfolio at the top; I could have bought that stock years ago for pennies and I would now be driving a pink convertible; et cetera. If you are a professional, you can feel that you "made a mistake," or, worse, that "mistakes were made," when you failed to do the equivalent of buying the winning lottery ticket for your investors, and feel the need to apologize for your "reckless" investment strategy (that is, what seems reckless in retrospect).
How can you get rid of such a persistent throb? Don’t try to willingly avoid thinking about it: this will almost surely backfire. A more appropriate solution is to make the event appear more unavoidable. Hey, it was bound to take place and it seems futile to agonize over it. How can you do so? Well, with a narrative. Patients who spend fifteen minutes every day writing an account of their daily troubles feel indeed better about what has befallen them. You feel less guilty for not having avoided certain events; you feel less responsible for it. Things appear as if they were bound to happen.
If you work in a randomness-laden profession, as we see, you are likely to suffer burnout effects from that constant second-guessing of your past actions in terms of what played out subsequently. Keeping a diary is the least you can do in these circumstances.
When to use it
Reflecting in writing on what was known before an accident and what became clear only afterward.
An investor recording the reasons for a decision before its outcome is known.
A manager reviewing earlier choices using the evidence available at the time.
Writing about regret to explore alternative interpretations of a past decision.
FROM THEORY TO EVERYDAY LIFE
In practice
Car Accident Guilt
A person feels responsible for an accident and repeatedly imagines leaving home earlier. Taleb suggests writing about such experiences to reduce retrospective guilt. A written account can explore those thoughts without establishing that the accident was inevitable or settling responsibility.
Investment Regret
An investor regrets missing a stock’s rise and feels they should have predicted it. A diary can record the information and uncertainty present when the decision was made, helping distinguish a poor decision from an unfavorable outcome.
A MOMENT TO REFLECT
Put it to work.
Can you recall a situation where you felt regret for not foreseeing an outcome? How might writing a narrative about it change your perspective?
What could a diary record about the information and uncertainty present when you made a decision?
In what ways might narrative therapy backfire if not done correctly?
CONTINUE THE CONVERSATION
Source texts
- The Black Swan The Impact of the Highly Improbable With a new section On Robustness and Fragility (Nassim Nicholas Taleb)