Inside the Planning Fallacy: The Causes and Consequences of Optimistic Time Predictions

Abstract

Individuals, organizations, and governments all commonly plan projects and estimate when they will be completed. Kahneman and Tversky (1979) suggested that such estimates tend to be optimistic because planners rely on their best-case plans for a current project even though similar tasks in the past have typically run late. As a result of this planning fallacy, predicted completion times for specific future tasks tend to be more optimistic than can be justified by the actual completion times or by the predictors' general beliefs about the amount of time such tasks usually take.