Planning fallacy

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Daniel Kahneman first used the term planning fallacy in a paper with Amos Tversky in 1979.

The planning fallacy ( english planning fallacy ) is the tendency of people and organizations underestimate how much time it to perfection a task need.

General

The English term was first suggested by Daniel Kahneman and Amos Tversky in a 1979 publication . The effect allows predictions for a wide range of tasks, including filling out tax papers, homework, building furniture, programming, and origami. The fallacy only influences predictions about one's own tasks; when outside observers predict the time to complete a task, they are pessimistic and overestimate the time required. In 2003, Lovallo and Kahneman proposed an expanded definition of the planning fallacy, namely the tendency to underestimate the time, costs and / or risks of future actions and at the same time to overestimate the benefits of these actions. According to this definition, the planning fallacy not only leads to exceeding the planned time frame, but also to cost explosions and lower benefits than planned.

Studies and Examples

In a 1994 study, 37 psychology students were asked to estimate how long it would take them to complete their theses. The mean estimate was 33.9 days. They also estimated how long it would take "if everything went as well as possible" (with an average of 27.4 days) and "if everything went as bad as possible" (with an average of 48.6 days). The average actual time to completion was 55.5 days, with only 30% of students completing their work in the predicted time.

Another study asked students to estimate when they would complete a study-related project. The researchers asked about the estimated times that students expected 50%, 75%, and 99% likelihood of completing their projects.

  • 13% of participants completed their project within the time they assigned a 50% chance of completion;
  • 19% finished within the time they assigned a 75% chance;
  • 45% finished within the time they assigned 99% probability.

A survey of Canadian taxpayers published in 1997 reported that respondents were sending their tax files about a week later than forecast. They were aware of their past difficulties in getting the files off on time, but expected to be finished sooner next time. This illustrates an important feature of the planning fallacy; that people recognize their past predictions as overly optimistic while insisting that their current predictions are realistic.

Explanations

Kahneman's and Tversky's original explanation was that when planning, people focused on the most optimistic scenario for the task, rather than using their full experience of how much time similar tasks would take. One explanation offered by Roger Buehler and colleagues is wishful thinking : people think tasks are completed quickly and easily because they want it to be done. In another publication, Buehler and colleagues propose an explanation based on the self-serving bias of past performance: By crediting tasks that ended well as merit, but blaming external influences for delays, people can disregard past experiences with poor scheduling to let. An experiment has shown that optimistic bias does not occur when people make their predictions anonymously. This suggests that people make optimistic estimates in order to make a positive impression on others.

An attempt was made to explain the planning fallacy within the framework of impression management theory.

Planners tend to focus their attention on the project and underestimate the time for illness, vacation, meetings and other overhead. They also tend not to plan projects in enough detail to predict individual tasks, such as placing a brick in a wall. This promotes unrealistic optimism bias and prevents the time required from being predicted with measurements, such as the time measurement for the placement of a brick and then multiplication by the number of bricks. In addition, complex projects that have no fixed goals often fall victim to a gradual expansion of the project goals ( mission creep ). As Fred Brooks reports in The Myth of the Man Month , adding extra staff to a project that is already delayed results in a number of risks and additional costs that may delay the project even further. This is known as "Brooks Law".

Another possible explanation is the need to obtain authorization imperative for the project : a large part of the project planning takes place in a context in which the approval of financial means is necessary in order to proceed with the project. Since the planner is often interested in getting the project approved, this dynamic can lead to the planner deliberately underestimating costs and effort. It is easier to get forgiveness from the financiers or clients for overdrafts afterwards than to get permission for the project with a realistic cost estimate at the beginning.

Methods for avoiding the planning fallacy

Daniel Kahneman, Amos Tversky and Bent Flyvbjerg developed the so-called reference class forecasting in order to eliminate or reduce the effects of planning errors when making decisions. The forecast is based on the results of similar situations in the past.

See also

Individual evidence

  1. ↑ a b c d e Mark V. Pezzo, Jordan A. Litman, Stephanie P. Pezzo: On the distinction between yuppies and hippies: Individual differences in prediction biases for planning future tasks . In: Personality and Individual Differences . 41, No. 7, 2006, pp. 1359-1371. ISSN  0191-8869 . doi : 10.1016 / j.paid.2006.03.029 .
  2. ^ Daniel Kahneman, Amos Tversky: Intuitive prediction: biases and corrective procedures . In: TIMS Studies in Management Science . 12, 1979, pp. 313-327.
  3. ↑ a b c d Buehler, Roger; Griffin, Dale, & Ross, Michael (2002). "Inside the planning fallacy: The causes and consequences of optimistic time predictions". In Thomas Gilovich, Dale Griffin, & Daniel Kahneman (Eds.), Heuristics and biases: The psychology of intuitive judgment , pp. 250-270. Cambridge, UK: Cambridge University Press.
  4. ^ A b Roger Buehler, Dale Griffin, Michael Ross: It's about time: Optimistic predictions in work and love . In: American Psychological Association (Ed.): European Review of Social Psychology . 6, 1995, pp. 1-32. doi : 10.1080 / 14792779343000112 .
  5. ↑ Dan Lovallo, Daniel Kahneman: Delusions of Success: How Optimism Under Mines Executives' Decisions . In: Harvard Business Review . July 2003, pp. 56-63.
  6. ^ Roger Buehler, Dale Griffin, Michael Ross: Exploring the "planning fallacy": Why people underestimate their task completion times . In: American Psychological Association (Ed.): Journal of Personality and Social Psychology . 67, No. 3, 1994, pp. 366-381. doi : 10.1037 / 0022-3514.67.3.366 .
  7. ^ Roger Buehler, Dale Griffin, Johanna Peetz: The Planning Fallacy: Cognitive, Motivational, and Social Origins . In: Advances in Experimental Social Psychology . 43, 2010, p. 9. Retrieved September 15, 2012.
  8. ↑ Flyvbjerg, B., 2008, "Curbing Optimism Bias and Strategic Misrepresentation in Planning: Reference Class Forecasting in Practice." ( Memento of the original from July 5, 2012 in the Internet Archive ) Info: The archive link was automatically inserted and not yet checked. Please check the original and archive link according to the instructions and then remove this notice. (PDF file; 287 kB) European Planning Studies, vol. 16, no. 1, January, pp. 3-21. @1@ 2Template: Webachiv / IABot / www.sbs.ox.ac.uk

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