Planning fallacy

We underestimate time required to finish a task. Result of Optimism Bias. This only affects predictions of your own tasks. When predicting for others, we tend to have a Pessimism bias.

Cause

  • Wishful thinking
  • People make optimistic estimates so as to create a favourable impression with others

Consequences

The planning fallacy results in not only time overruns, but also cost overruns and benefit shortfalls.

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