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Planning Fallacy

Definition

The planning fallacy refers to a specific form of optimistic bias wherein people underestimate the time that it will take to complete an upcoming task even though they are fully aware that similar tasks have taken longer in the past. An intriguing aspect of this phenomenon is that people simultaneously hold both optimistic beliefs (concerning the specific future task) as well as more realistic beliefs (concerning relevant past experiences). When it comes to planning the future, people can know the past and yet be doomed to repeat it.

The tendency to underestimate task completion times has important practical implications. Governments, businesses, and individuals all spend a considerable amount of time, money, and effort trying to forecast how long projects will take to complete. In daily ...

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