Planning fallacy

What it is

The planning fallacy is the tendency to underestimate how long a task will take, how much it will cost, or how many problems it will run into. The odd part is that it persists even when we know that similar tasks have run late in the past. We remember the past delays, yet still expect this time to be different.

An everyday example

Someone decides to repaint their living room on a Saturday. In their head the plan is simple: move the furniture, two coats, done by dinner. In reality there are nail holes to fill, tape to apply, a trip back to the store for more paint, and a second coat that needs longer to dry than the can suggested. The job spills into Sunday evening.

None of these steps was a surprise on its own. What was missing was an allowance for the ordinary friction that almost every project has.

Why it happens

When we plan, we picture how the task will unfold, step by step, usually along the smoothest path. Buehler, Griffin and Ross (1994) found that people making predictions focused mostly on this future scenario and rarely brought in their own past experience. When they did recall earlier delays, they tended to explain them away as one-off events.

Kahneman and Lovallo (1993) call this the “inside view”: treating each project as unique and judging it by its own details, instead of looking at how comparable projects actually turned out.

How to counter it

• Take the outside view. Before estimating, ask: how long did similar jobs take, for me or for others? Start from that number, then adjust (Kahneman & Lovallo, 1993).
• Check your record. Compare a few past estimates with what really happened, and note the typical gap.
• Link the past to the plan. In Buehler et al.’s studies, prompting people to connect relevant past experiences to their current forecast made their predictions less optimistic.
• Break the task down and add time for the unglamorous parts: setup, waiting, fixing mistakes.

What the research shows

In one study, students predicted when they would finish their honors theses. On average they expected to need about 34 days; the actual average was about 56 days, and most missed even their own estimate (Buehler et al., 1994). Further studies with everyday tasks showed the same pattern: people knew they had often finished late before, but did not apply that knowledge to the task at hand.

The bias concerns our own plans in particular. Forecasts based on the track record of similar projects tend to be more realistic, which is the logic behind the outside view (Kahneman & Lovallo, 1993).