Contingency bias, also known as the contingency error, is a psychological phenomenon that refers to our tendency to retrospectively view events as more predictable or probable than they actually were. This cognitive bias can significantly influence our judgement and decision-making.

To understand contingency bias, let's look at a simple example: Imagine someone predicts that it will rain tomorrow, and it does rain. We tend to think this prediction is wise and accurate. But what happens if the forecast doesn't materialise and it's sunny instead? In this case, we might consider the forecast to be less reliable or even erroneous. This is a classic example of contingency bias.

An important facet of contingency bias is the retroactive distortion of our perception. When we look back on past events, we tend to overestimate the probability of certain outcomes when we know they have already occurred. This can lead to incorrect conclusions when we try to predict future events or make decisions.

This bias can have an impact in various areas of life, from financial planning to the assessment of risk in medicine. People may tend to view past investment decisions as wiser if they have previously achieved returns, and risky medical procedures as safer if they have previously been successful.

In order to overcome the contingency bias, it is important to be aware of your own thought patterns. Critical thinking and an objective assessment of past events can help to minimise distorted perceptions. It is also helpful to consider statistical data and sound information in decision-making processes instead of relying solely on retrospective judgements.

Overall, contingency bias is an interesting phenomenon of the human psyche that reminds us how our memory and perception of events can be influenced. Understanding this bias can help us make better decisions and improve our ability to predict future events.