Recency Bias

What is it?

Recency bias is the cognitive tendency to weight recent events or information more heavily than earlier data when forming judgments. This bias arises because recent memories are more vivid, accessible, and emotionally charged. In performance evaluations, it causes managers to disproportionately weight the last few weeks, ignoring months of prior work. In investing, recent market performance dominates expectations, leading to buying high after rallies and selling low after crashes. The bias affects hiring (emphasizing recent interview impressions), relationships (letting recent conflicts overshadow years of positive history), and strategic planning (extrapolating recent trends indefinitely). Recency bias is particularly dangerous in environments with high variability or mean reversion, where recent performance is a poor predictor of future results. It contributes to boom-bust cycles and prevents learning from historical patterns. Counteracting recency bias requires systematic data collection over longer periods, structured evaluation frameworks that force consideration of historical performance, and deliberately asking "is this recent trend representative of the longer pattern?"