Which bias leads individuals to believe they can predict random events?

The belief that individuals can predict random events is associated with randomness error. This bias occurs when people mistakenly perceive patterns or trends in what are actually random sequences. For example, if someone believes that a coin will land on heads after several consecutive tails, they are falling prey to this error. Randomness error can lead to overconfidence in one’s ability to predict outcomes that are fundamentally based on chance.

In contrast, the other concepts do not specifically relate to the misjudgment of random events. Risk aversion refers to the tendency to prefer outcomes that are certain over those that are uncertain, especially when facing potential losses. Hindsight bias involves the inclination to see events as having been predictable after they have already happened. Utilitarianism is an ethical theory focusing on maximizing overall happiness and doesn't pertain to the misunderstanding of randomness. Therefore, the focus on predicting random events clearly aligns with the concept of randomness error.