Outcome & SelfBias #13

Regression to the Mean

Extreme outcomes often drift back toward average.

The statistical phenomenon where an unusually high or low measurement is likely to be followed by a measurement closer to the average, often mistaken for a causal effect.

Why it matters: Kahneman used this to explain why praise or punishment after extreme performance appears to have opposite effects.

Watch for

Turning normal statistical movement into a story about triumph or failure.

Try this

Ask whether the result was unusually extreme to begin with.

Real-world example

A breakout sales performance is followed by a more average one, which is mistakenly attributed to a change in strategy rather than natural fluctuation.

Key researchers

Francis Galton, Daniel Kahneman

First described in 1886

Psychological mechanism

Narrative Addiction. The human brain hates randomness and is hardwired to find intent and cause-and-effect everywhere. It cannot intuitively grasp that extreme peaks and valleys naturally flatten out on their own over time.

Seminal research

First mathematically detailed by Francis Galton (1886) in height studies. Formally tied to cognitive errors by Daniel Kahneman (2011) in Thinking, Fast and Slow.