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Paradigm Challenge  /  Economics

People will literally blame you for having bad luck, even if they can see you did everything perfectly right.

In a principal-agent experiment, evaluators punished 'unlucky' workers significantly more than lucky ones, even though the workers' effort was perfectly visible and identical. This suggests that humans are hard-wired to use outcomes to determine blameworthiness, effectively ignoring visible proof of diligence in favor of 'moral luck.'

Original Paper

Moral Luck and the Persistence of Outcome Bias

SSRN  ·  6315819

Outcome bias occurs when evaluators overemphasize realized outcomes relative to the information they possess about agents' actions. We use a principal-agent experiment to identify outcome bias in punishment decisions. Despite perfectly-observable effort, unlucky agents receive 0.27 SD more punishment than their equally diligent but lucky counterparts. This bias persists into subsequent interactions. Both principals and independently-recruited third parties evaluate agents by reporting beliefs ab