In Thinking, Fast and Slow Daniel Kahneman describes the planning fallacy as “plans or forecasts that are unrealistically close to best-case scenarios.”
Examples of this abound. In 1957 The Sydney Opera house was estimated to cost $7 million (Australian dollars) and the completion date was set for early 1963. It opened in 1973 with a price tag of $102 million.
In you are like just about every other human, you make the same kind of mistake in your own life all the time. You have an errand to run. You think it will take a certain amount of time, but then you discover that, after all, nothing takes five minutes. But in your head, you had concocted a best-case scenario. In today's lesson, we look at how we can think around the planning fallacy.