Planning Fallacy
Definition
is a phenomenon in which predictions about how much time will be needed to complete a future task display an [optimism bias] and underestimate the time needed.
first proposed by [Daniel Kahneman and [Amos Tversky] in 1979.
This phenomenon sometimes occurs regardless of the individual’s knowledge that past tasks of a similar nature have taken longer to complete than generally planned.The bias only affects predictions about one’s own tasks; when outside observers predict task completion times, they show a pessimistic bias, overestimating the time needed. The planning fallacy requires that predictions of current tasks’ completion times are more optimistic than the beliefs about past completion times for similar projects and that predictions of the current tasks’ completion times are more optimistic than the actual time needed to complete the tasks. In 2003, Lovallo and Kahneman proposed an expanded definition as the tendency to underestimate the time, costs, and risks of future actions and at the same time overestimate the benefits of the same actions. According to this definition, the planning fallacy results in not only time overruns, but also [cost overruns] and [benefit shortfalls].