Which outcome is commonly associated with hindsight bias?

Hindsight bias is the cognitive phenomenon in which people perceive past events as having been more predictable than they actually were at the time. This bias often leads individuals to believe that they knew the outcome of an event before it happened, which can foster overconfidence in their ability to predict future trends.

In the context of the question, the correct outcome associated with hindsight bias is overconfidence in forecasting future trends. When individuals fall prey to hindsight bias, they may underestimate the complexity and uncertainty of future events because they feel they have successfully anticipated previous outcomes. This creates an illusion of understanding and control, leading to a heightened confidence in their predictive capabilities.

The other options do not align with the nature of hindsight bias. For instance, underestimating the accuracy of past predictions runs contrary to the very essence of hindsight bias, which is characterized by overestimating one's prior knowledge. Reliable recollection of market events implies an accurate memory, while hindsight bias often skews recollections. Similarly, avoiding reliance on historical data does not follow from hindsight bias; in fact, the bias may lead to a misinterpretation of historical data due to the skewed perception that past events were easily predictable.