Biology of Business

Concept · Cognitive Bias: Decision-making and judgment biases

Outcome bias

Origin: Baron & Hershey, 1988

By Alex Denne

Biological Parallel

Social species judge leaders by observable outcomes because decision processes are invisible. A wolf pack following an alpha on a risky bison hunt that succeeds reinforces that leadership; the identical decision ending in injury undermines it. Chimpanzee alphas maintain status partly through successful coalition raids—a raid that fails costs political capital regardless of whether the decision was strategically sound. Cleaner fish choose client fish based on prior observed feeding success, not unseen decision quality. The constraint is informational: groups cannot observe counterfactual outcomes or internal reasoning, only results. Natural selection operated on outcomes, not intentions. Evaluating by results rather than process isn't irrational—it's the only evaluation possible when you can't access others' mental states. The bias reflects the limits of social observation.