The Planning Fallacy

The Planning Fallacy

Daniel Kahneman (2015) describes working with an intelligent group of people in the development of a school-based curriculum that focused on judgement and choices. The workgroup would meet on Fridays and comprised a well-established expert on school-based curriculums. The group were able to plan in a short time what the curriculum would look like and the blueprints for the textbook. So how long would the project take?

Kahneman who loves an opportunity to further investigate intuitions and the dual systems asked all the team members to write down their predictions of how long it would take to complete the textbook and curriculum. Estimates varied between 1.5 – 2.5 years. Kahneman then asked the expert on curriculum’s in the group if he was aware of any other teams that had taken on similar tasks in the past. The expert stated he did know and that those groups took between 7-9 years to complete their project, also, their current group compared relatively below average when it came to skills and experience in developing a curriculum. The group ignored these obviously wrong numbers as they had already achieved so much in so little time so what could possibly go wrong? 8 years later the project was completed but was never used.

The overly optimistic approach to planning projects is a trap we are all likely to fall into. This has already been well-established as Kahneman points out with large construction projects where the original proposal of a certain amount of time and money are often blown out many times their original predictions. We conjure in our minds the best-case scenario and then adjust from this anchor. Even an expert like Kahneman ignored the base-rates which predictions and expectations should be based off as these are the best evidence of future predictions.

You can’t tell what is going to happen next and whilst things perhaps are going well now and that if such conditions continued then perhaps projects completions would match the prediction, however, conditions continually change and often unexpectedly.

Kahneman added tips for mitigating the planning fallacy which includes

  • Find a reference class – That is looking for a similar example of someone or a group undertaking a similar project in scope and size
  • Obtain the statistics in that reference class – What are the base rates in terms of time and resources needed to achieve the goal
  • Use specific information (Facts) to adjust the baseline predictions

Keep this in mind when starting a future project or even test it in your everyday life by writing down a prediction and then comparing it to available base rates to determine your prediction efficacy.

Reference

Kahneman, D. (2015). Thinking, fast and slow. New York: Farrar, Straus and Giroux.