What Is the Planning Fallacy

The bias is usually explained by inexperience, but this is different. In experiments, people were asked to estimate how long their own work would take, and then how long exactly the same work would take someone else. Their own estimate was noticeably more optimistic, even though they knew just as much about the task.

The difference comes from the angle you take. People think about their own work from the inside: they imagine a sequence of steps, each of which seems quick. They think about someone else's work from the outside and remember how such tasks usually turn out.

The inside view almost always paints a smooth scenario. It leaves out the colleague who gets sick, the forgotten approval, the file that breaks and the three small things that surface on the last day. Each small thing is unpredictable on its own, but together they are entirely predictable.

A practical approach is not to improve your forecast, but to change your angle. Instead of asking, "How long will I need?" ask a different question: "How long do tasks like this usually take people like me?" The second question almost always gives a more accurate answer.

This approach has an unpleasant feature: it gives unpleasant answers. The outside view is usually longer than the estimate you want to give, so it is easy to reject by explaining that "this case is different." That is usually where the approach breaks down.

It works for everyday tasks too. Renovations, moving, a thesis, sorting through paperwork - in all these cases, it helps to remember not your own plan, but how things went for people you know. The bigger the task, the greater the gap between the plan and reality.