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 life, accurate predictions allow individuals to plan effectively and coordinate their schedules with those of friends, family members, and coworkers. Unrealistic completion estimates can have serious economic, personal, and social costs and thus merit research attention.
Planning Fallacy Evidence and Causes
The most direct evidence for the planning fallacy comes from studies in which people predict how long an upcoming project will take to complete, report completion times for similar projects in the past, and subsequently carry out the project. For example, university students reported that they typically completed their writing assignments about a day before the due date, but predicted that they would complete their current summer essay more than a week before it was due. They tended to finish the essay, as usual, about a day before the deadline. The tendency to underestimate completion times has been observed for a wide variety of activities ranging from daily household chores to large-scale industrial projects.
Why would people repeatedly underestimate how long their tasks will take to complete? According to cognitive explanations, the bias results from the kinds of information that people consider. When generating a task-completion prediction, people’s natural inclination is to plan out the specific steps that they will take to successfully complete the project. The problem with this approach is that events don’t usually unfold exactly as planned. Given the vast number of potential impediments, there is a great likelihood that people will encounter unexpected problems, delays, and interruptions. When people focus narrowly on a plan for successful task completion, they neglect other sources of information—such as past completion times, competing priorities, and factors that may delay their progress—that could lead to more realistic predictions.
This cognitive explanation has been supported by studies in which individuals describe their thoughts while predicting when they will finish an upcoming project. Most descriptions focus on specific future plans whereas very few descriptions mention relevant past experiences or potential problems. In addition, experimental studies have shown that people who are instructed to develop a detailed future plan for a task make more optimistic predictions than those who are not. These findings imply that people’s unrealistic predictions are caused, at least in part, by their tendency to focus narrowly on a plan for successful task completion.
Motivation can also play a role, by guiding the cognitive approach that people take. For example, strong desires to finish tasks early may increase people’s focus on future plans and decrease their focus on past experiences, resulting in highly optimistic predictions. The interplay between motivation and cognition was illustrated in a field study. Taxpayers who expected an income tax refund, and were thus strongly motivated to file their tax return early, estimated they would file their return about 10 days earlier on average than did taxpayers who did not expect a refund. In fact, the two groups did not differ in when they filed their returns, which was much later than either group had predicted. Incentives for early task completion appear to increase people’s attention to future plans and reduce attention to relevant past experiences—the very pattern of cognitive processes that fuels the planning fallacy.
Planning Fallacy Moderating Factors and Strategies
Given the potential costs of unrealistic predictions, researchers have attempted to identify factors that may limit their occurrence. The findings suggest that the bias is remarkably robust. It appears for a wide range of tasks and activities, it generalizes across individual differences in personality and culture, and it appears for group predictions as well as individual predictions. One factor that does appear to have a great influence, however, is whether people’s predictions involve their own tasks or those of others. When people make predictions about others’ tasks, rather than their own, they are less prone to underestimate completion times. This actor-observer difference makes sense given the cognitive and motivational causes of the planning fallacy. Observers typically do not have access to the wealth of information that actors possess about their future plans and circumstances, making it difficult for observers to generate a detailed future plan. Also, neutral observers do not generally share the same motivations as actors (e.g., to complete the task promptly), and thus may be less inclined to focus selectively on information that supports an optimistic forecast. Whenever it is important to avoid unrealistic predictions, then, individuals may be well advised to consult with neutral observers.
Researchers have also examined strategies that individual forecasters can use to avoid underestimating their own completion times. One strategy involves linking past experiences with specific plans for an upcoming task. Specifically, before generating a task-completion prediction, forecasters are asked to recall when they typically finish projects, and then to describe a plausible scenario that would result in the upcoming project being done at the usual time. This procedure should prevent people from either ignoring past experiences or denying the relevance of those experiences, and it has been shown to eliminate the usual optimistic bias. Another strategy that can be effective is to break down a multifaceted task into its smaller subcomponents, and consider how long each of the subcomponents will take.
- Buehler, R., Griffin, D., & Ross, M. (1994). Exploring the “planning fallacy”: Why people underestimate their task completion times. Journal of Personality and Social Psychology, 67,366-381.
- Buehler, R., Griffin, D., & Ross, M. (2002). Inside the planning fallacy: The causes and consequences of optimistic time prediction. In T. D. Gilovich, D. W. Griffin, & D. Kahneman (Eds.), Heuristics and biases: The psychology of intuitive judgment (pp. 250-270). Cambridge, UK: Cambridge University Press.
- Kahneman, D., & Tversky, A. (1979). Intuitive prediction: Biases and corrective procedures. In D. Kahneman, P. Slovic, & A. Tversky (Eds.), Judgment under uncertainty: Heuristics and biases (pp. 414-421). Cambridge, UK: Cambridge University Press.