The Planning Fallacy: Cognitive, Motivational, and Social Origins

doi:10.1016/S0065-2601(10)43001-4

Advances in Experimental Social Psychology

Volume 43, 2010, Pages 1-62

https://doi.org/10.1016/S0065-2601(10)43001-4 Get rights and content

Abstract

The planning fallacy refers to a prediction phenomenon, all too familiar to many, wherein people underestimate the time it will take to complete a future task, despite knowledge that previous tasks have generally taken longer than planned. In this chapter, we review theory and research on the planning fallacy, with an emphasis on a programmatic series of investigations that we have conducted on this topic. We first outline a definition of the planning fallacy, explicate controversies and complexities surrounding its definition, and summarize empirical research documenting the scope and generality of the phenomenon. We then explore the origins of the planning fallacy, beginning with the classic inside–outside cognitive model developed by Kahneman and Tversky [Kahneman, D., & Tversky, A. (1979). Intuitive prediction: biases and corrective procedures. TIMS Studies in Management Science, 12, 313–327]. Finally, we develop an extended inside–outside model that integrates empirical research examining cognitive, motivational, social, and behavioral processes underlying the planning fallacy.

Section snippets

Defining the Planning Fallacy

The planning fallacy refers to a readily observable phenomenon: the conviction that a current project will go as well as planned even though most projects from a relevant comparison set have failed to fulfill their planned outcomes. The term was first introduced to the psychological literature by Kahneman & Tversky, 1979, Kahneman & Tversky, 1982a, p. 415) to describe people's tendency “to underestimate the time required to complete a project, even when they have considerable experience of past

Documenting the Planning Fallacy

To identify examples of the planning fallacy requires two related but separable findings. First, predictions of current task completion times must be more optimistic than beliefs about the distribution of past completion times for similar projects; second, predictions of current task completion times must be more optimistic than actual outcomes. A high degree of confidence is also diagnostic, but is not required by the classic definition.

The Standish Group publishes an annual survey about the

The inside versus outside view

Given the prevalence of optimistic predictions, and ample empirical evidence of the planning fallacy, we now turn to examining the psychological mechanisms that underlie people's optimistic forecasts. In particular, how do people segregate their general theories about their predictions (i.e., that they are usually unrealistically optimistic) from their specific expectations for an upcoming task? Kahneman and Tversky (1979) explained the prediction failure of the curriculum development team

Empirical Support for the Inside–Outside Model

An important goal of our initial studies of the planning fallacy was to test the inside–outside account. We first looked for evidence that a focus on the future—and a consequent neglect of the past—was indeed characteristic of the planning process. In several studies, we included “think-aloud” procedures to record the “online” narratives of participants as they estimated their completion times for various tasks, most of which had specific deadlines. We instructed respondents to say aloud every

Identifying key elements of the inside focus

A basic axiom of the planning fallacy is that the future is perceived to be rosier than the past; realistically pessimistic lessons from the past fade from a forecaster's attention in light of optimistic plans about the future. However, according to Kahneman and Tversky's (1979) initial definition, the inside view includes all case-specific content including possible problems or obstacles to completion as well as plans for how to overcome them. Thus, an inside view can, at least in theory, vary

Concluding Perspectives

The planning fallacy is a phenomenon rooted in daily life and daily experience, rich enough to keep our research group busy for the best part of two decades. Although this chapter explored the planning fallacy in the domain of task completion predictions, we have also documented similar patterns and psychological processes in people's tendency to overpredict the longevity of their romantic relationships (Buehler et al., 1995; see also MacDonald & Ross, 1999) and to overestimate the intensity of

Acknowledgments

This program of research was supported by grants from the Social Sciences and Humanities Research Council of Canada.

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Chapter One - The Planning Fallacy: Cognitive, Motivational, and Social Origins

Abstract

Section snippets

Defining the Planning Fallacy

Documenting the Planning Fallacy

The inside versus outside view

Empirical Support for the Inside–Outside Model

Identifying key elements of the inside focus

Concluding Perspectives

Acknowledgments

Organizational Behavior and Human Decision Processes

Organizational Behavior and Human Decision Processes

Trends in Cognitive Sciences

Organizational Behavior and Human Decision Processes

Organizational Behavior and Human Decision Processes

Organizational Behaviour and Human Decision Processes

Organizational Behavior and Human Decision Processes

Cognitive Psychology

Journal of Experimental Social Psychology

Organizational Behavior and Human Decision Processes

Organizational Behavior and Human Decision Processes

Cognition

Journal of Experimental Social Psychology

Journal of Experimental Social Psychology

Journal of Experimental Social Psychology

Journal of Consumer Psychology

Last chance to see

Procrastination, deadlines, and performance: Self-control by precommitment

Psychological Science

Eliminating the hindsight bias

Journal of Applied Psychology

Accuracy, error, and bias in predictions for real versus hypothetical events

Journal of Personality and Social Psychology

The effects of mindset on behavior: Self-regulation in deliberative and implemental frames of mind

Personality and Social Psychology Bulletin

Long-range forecasting: From crystal ball to computer

Self-efficacy: Toward a unifying theory of behavioral change

Psychological Review

The mythical man-month: Essays on software engineering

An economic model of the planning fallacy

Motivated prediction in observers

Intensity bias in affective forecasting: The role of temporal focus

Personality and Social Psychology Bulletin

The role of motivated reasoning in optimistic time predictions

Personality and Social Psychology Bulletin

Exploring the “planning fallacy”: Why people underestimate their task completion times

Journal of Personality and Social Psychology

It's about time: Optimistic predictions in work and love

Inside the planning fallacy: The causes and consequences of optimistic time predictions

Culture and optimism: The planning fallacy in Japan and North America

Construction of activity duration and time management potential

Applied Cognitive Psychology

Cognitive and motivational factors influencing time predictions

Journal of Experimental Psychology: Applied

On the self-regulation of behavior

Anchoring, efficacy, and action: The influence of judgmental heuristics on self-efficacy judgments and behavior

Journal of Personality and Social Psychology

Decomposed versus holistic estimates of effort required for software writing tasks

Management Science

Rational choice in an uncertain world

Should we plan for upcoming tasks? Effects of planning on prediction accuracy for simple and difficult assignments

Prediction: The inside view

Digging the dirt at public expense: Governance in the building of the Erie Canal and other public works

The pros and cons of temporally near and distant action

Journal of Personality and Social Psychology

A theory of cognitive dissonance

Fault trees: Sensitivity of estimated failure probabilities to problem representation

Journal of Experimental Psychology: Human Perception and Performance

Curbing optimism bias and strategic misrepresentation in planning: Reference class forecasting in practice

European Planning Studies

Megaprojects and risk: An anatomy of ambition

Delusion and deception in large infrastructure projects: Two models for explaining and preventing executive disaster

California Management Review

What causes cost overrun in transport infrastructure projects?

Transport Reviews

How (in)accurate are demand forecasts in public works projects?

Journal of the American Planning Association