Working Paper

Hindsight Bias and Trust in Government

Holger Herz, Deborah Kistler, Christian Zehnder, Christian Zihlmann
CESifo, Munich, 2022

CESifo Working Paper No. 9767

We empirically assess whether hindsight bias affects citizens’ evaluation of their political actors. Using an incentivized elicitation technique, we demonstrate that people systematically misremember their past policy preferences regarding how to best fight the Covid-19 pandemic. At the peak of the first wave in the United States, the average respondent mistakenly believes they supported significantly stricter restrictions at the onset of the first wave than they actually did. Exogenous variation in the extent of hindsight bias, induced through a randomized survey experiment, indicates that hindsight bias has a negative causal impact on the change in trust in government.

CESifo Category
Public Choice
Behavioural Economics
Keywords: hindsight bias, trust in government, evaluation distortion, biased beliefs
JEL Classification: D720, D830, D910