Forecasting beset by tendency to think we are good at predictions

"If a coin is tossed four times in a row, for example, and each time comes up heads, there is a bias towards expecting heads on the fifth turn. This tendency to see the world as more deterministic than it often is leads to overconfidence about what the future holds."

"Worryingly, psychology also suggests people are prone to forgetting their forecasts have been wrong."

“Unless reminded with hard evidence, people seem genuinely to believe that their prior predictions were different to what they actually were. The tendency to absolve ourselves of past predictive error is deep seated and, unless consciously checked, automatic,” Mr Broadbent said."

See also:

Daniel Kahneman - an Israeli-American psychologist and winner of the 2002 Nobel Memorial Prize in Economic Sciences, notable for his work on the psychology of judgment and decision-making, behavioral economics and hedonic psychology.

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