Exploring the "planning fallacy": Why people underestimate their task completion times.

Abstract

This study tested 3 main hypotheses concerning people's predictions of task completion times: (a) People underestimate their own but not others' completion times, (b) people focus on plan-based scenarios rather than on relevant past experiences while generating their predictions, and (c) people's attributions diminish the relevance of past experiences. Results supported each hypothesis. Ss' predictions of their completion times were too optimistic for a variety of academic and nonacademic tasks. Think-aloud procedures revealed that Ss focused primarily on future scenarios when predicting their completion times. In Study 4, the optimistic bias was eliminated for Ss instructed to connect relevant past experiences with their predictions. In Studies 3 and 4, Ss attributed their past prediction failures to relatively external, transient, and specific factors. In Study 5, observer Ss overestimated others' completion times and made greater use of relevant past experiences.In 1871, the colony of British Columbia agreed to join the new country of Canada on the condition that a transcontinental railway reach the west coast by 1881. In fact, because of the intervention of an economic depression and political changes, the last spike was not driven until 1885, 4 years after the predicted date of completion. Nearly 100 years later, in 1969, the mayor of Montreal proudly announced that the 1976 Olympics would feature a state-of-the-art coliseum covered by the first retractable roof ever built on a stadium. According to mayor Jean Drapeau, the entire Olympic venture would cost $ 120 million and "can no more have a deficit than a man can have a baby" (Colombo, 1987, p. 269). Because of economic problems, strikes, and other construction delays, the stadium roof was not in place until 1989, 13 years after the predicted date of completion-and cost $120 million by itself! Many people consider the Sydney Opera House to be the champion of all planning disasters.

Time Prediction Methods and Principles

“…The study found that those who were required to hand in the assignment (the observers) tended to be overoptimistic, but those who predicted the completion date for another student (the actors) were not [9]. The actors believed they would complete the work an average of 1.3 days earlier than they did.…”

“…9 Take home message 2: People have a tendency to give predictions of most likely time usages that are the same or too close to those given when instructed to assume best-case or ideal conditions. In short, what we think is realistic time usage tends to be too close to the best-case time usage.…”

“…For instance, students completing a computer assignment gave less overoptimistic completion time predictions (delivery date predictions) when they collected and used the time spent on similar previously completed tasks to predict the time on the new task [9]. One benefit of the use of close analogies instead of decomposition is that a realistic number of unknown components and unexpected events, which in a decomposition-based time prediction would have to be properly identified, is often an inherent part of the analogy's time usage.…”

Ignorance is Bliss: The Information Malleability Effect

“…Calderson (1993) found that professional financial analysts consistently overestimated the earnings realized. It is interesting to note that many of these optimistic biases occurs even when people acknowledge that many of the predictions made by them in the past were unrealistic (Buehler et al 1994). Optimism is said to stem from both cognitive and motivational sources and I review both these sources in the following section.…”

“…Such optimism manifests itself in numerous forms. For instance, Buehler, Griffin and Ross (1994) document the planning fallacy, where people expect to finish a personal project in much less time than what it really takes to finish.…”