Individuals faced with a positive outcome following a decision would view that outcome as a reflection of their ability and skill. However, when faced with a negative outcome, they would ascribe it to bad luck or to someone else’s intervention
My daughter, of 6 years old, 2 days ago was answering some questions on a book. At the question “It makes you take bad marks at school”, she answered in a lightning way “The Teacher!”
Individuals faced with a positive outcome following a decision would view that outcome as a reflection of their ability and skill. However, when faced with a negative outcome, they would ascribe it…
This asymmetry – in the attributions people make for their personal outcomes – is called self-attributing bias or self-serving bias.
Self-serving attributions increases the feeling of self-worth. Perceiving oneself as responsible for desired outcomes enhances personal self-worth, whereas perceiving oneself as responsible for undesired outcomes diminishes self-worth.
It is evident in workers who attribute receiving promotions to hard work and exceptional skill, yet attribute denial of promotions to unfair bosses.
It is evident among athletes who are more likely to assume personal responsibility when they perform well in the sports arena than when they perform poorly.
It is even evident in drivers who attribute accidents to external factors – the weather, the condition of their car, other drivers – yet attribute the narrow avoidance of an accident to their alertness and finely honed driving skills.
People view their positive outcomes as primarily internally caused, yet view their negative outcomes as primarily externally caused. Internal causes generally refer to abilities, skills, personal traits, or effort, whereas external causes generally refer to the actions or inactions of others, luck, and circumstances such as the weather or economy.
People likely perceive the causes of their desired outcomes as more under their personal control or at least as foreseeable, yet perceive the causes of their undesired outcomes as outside their personal control or as unforeseeable. Moreover, this difference in sense of control and foreseeability is sensible. If people could have foreseen or controlled the occurrence of an undesired outcome, they would have taken actions to avoid it.
This fallacy is even more pronounced in the field of the financial sector. Investors who make big profits like to slap themselves on the back, but as soon as they start making a loss they all too often point the finger at unfavorable market conditions and bad luck.
A research conducted by Arvid Hoffmann and Thomas Post (2014) of Maastricht University demonstrates such behavior among a group of Dutch investors. Over a period of three months, they put the following statement to a group of investors who were investing, on average, more than €50,000: “The recent performances of your investment portfolio gives an accurate reflection of your investment skills. Please indicate the extent to which you agree with this, on a scale of 1 (agree entirely) to 7 (disagree entirely)”. The low scores indicate that investors take no responsibility for their recent investment performances. It turns out that, on average, people more often disagreed with the statement in the months in which they achieved a lower yield. Furthermore, the investors in the top 50% of performances, in that month, more often agreed with the statement than investors in the lower 50% of performances. In short, if these investors perform less than expected, they feel that their performances correspond less well with their investment skills. To put it another way, good performances are more likely to be attributed to our investment skills, while poor performances are often associated with other factors: the self-serving bias.