Outcome bias in managerial decisions

Decisions informed by past events can be distorted when outcomes partially determined by chance are misinterpreted as being purely skill-based. This can lead to outcome bias, where decisions are evaluated based on results rather than on the quality of the performance that produced them. Outcome bias is prevalent across various domains, including managerial decision-making. This paper investigates outcome bias in professional football, a highly competitive industry. The analysis focuses on managers who were replaced mid-season between 2017/18 and 2024/25 in the top divisions of the five major European football leagues. The main finding is that clubs tend to change managers in response to recent match results rather than to underlying performance indicators. This behavior reflects an economically inefficient decision-making process driven by outcome bias.