economics Paradigm Challenge

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

March 20, 2026

Original Paper

Moral Luck and the Persistence of Outcome Bias

SSRN · 6315819

The Takeaway

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.'

From the abstract

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