The planning fallacy

The planning fallacy

(Or why you’re always late)

Have you ever been a day late or a couple of bills short? Have you ever underestimated the time needed to pack your suitcase or finish a paper? First of all, congratulations. This means that you’re a human being and, as a human, you’re subject to the planning fallacy. First proposed by Daniel Kahneman and Amos Tversky, the planning fallacy refers to the phenomenon where the time we need to complete a task is systematically underestimated. This does not only apply to time though, but other resources, like money, too. So why do we systematically underestimate the time or money we need to complete a specific project?

Kahneman and Tversky attributed the planning fallacy to optimism bias. That is, they explain that planners tend to envision the most optimistic version of the task, rather than relying on their previous experiences of how much time similar tasks required. On the other hand, Roger Buehler and colleagues offer two other reasons for the fallacy. The first is wishful thinking, which means that planners underestimate the time or resources needed, because they really want this to be the reality. The second is a self-serving bias at work in people’s interpretations their past performance. By taking credit for tasks that went well but blaming delays on outside influences, people can discount past evidence of task length or difficulty.

In one study by Buehler and Griffin, college students were asked to give their most optimistic and most pessimistic estimates of how long it would take them to complete their senior thesis. The results showed that students’ actual completion times were a remarkable 21.6 days longer than their most optimistic estimate (55.5 days to 33.9 days) and less than half of the students (48.7%) completed their thesis by even their most pessimistic estimate. Similar results have been found in a variety of other settings, including writing software programs, completing tax forms, and even Christmas gift shopping.

Now, you might think that you’re the exception to the rule, especially as you are now aware of the planning fallacy. In fact, you might even argue that, while your past predictions have been inaccurate, your current plans are definitely realistic. But, here’s the catch. A defining feature of the planning fallacy is that people recognise that their past predictions have been over-optimistic, while still insisting that their current predictions are realistic. What is more, the effects of the planning fallacy hold even when we are warned against them or told to plan for the worst case scenario.

But, before you throw your hands up in the air in frustration, there are several ways to mitigate the planning fallacy and lessen its effects on your ability to meet deadlines or, say, pack a suitcase. First, make the amount of effort involved in completing a task salient. This can be done by relating it to a similar past experience or segmenting the task into smaller sub-tasks. Second, research by Koole and colleagues has shown that implementation intentions promote timely task completion. Implementation intentions are concrete plans that accurately show how, when, and where you will act. For example, your implementation intention could be “I will pack my suitcase when I get home from gym by creating outfits for each day that I am abroad”. By creating these intentions, you have committed to the completion of the task and explicitly recruited willpower. No, this does not mean you’ve suddenly become a Jedi, but it should improve your planning skills a ton.

Read more about Buehler and Griffin’s study here.

Read Koole’s work on overcoming the planning fallacy through willpower here.

Get in touch to solve your behavioural challenge here.