112 men died in incidents associated with its construction. Apparently the planning fallacy doesn’t act inevitably. A special property of pressure-induced debt Hoover Dam, aerial view, September 2017. Under construction from 1931 to 1936, the cost of the dam was $48.8M ($639M in 2016 dollars) under a fixed-price contract. Rather, it’s a variant of the N-Person Prisoner’s Dilemma. call this mechanism the “Conspiracy of Optimism,” possibly facetiously, it isn’t actually a conspiracy. This competition compels them to be unrealistically optimistic about their objectives, costs, and schedules. They observe that because organizational resources are finite, project champions compete with each other for resources. describe a dynamic that exacerbates the problem. Enter the n-person prisoner’s dilemmaīoehm et al. So there’s a tendency to promise lower costs, faster delivery, and greater benefits than anyone can reasonably expect. Failing to harvest lessons from the distributional evidence, which is inherently more diverse than singular evidence, the planners tend to underestimate cost and schedule. They do this even when the singular evidence is scanty or questionable. ![]() The planning fallacy is planners’ tendency to pay too little attention to distributional evidence and too much to singular evidence. ![]() Distributional evidence is specific to similar past efforts. Singular evidence is specific to the case at hand. They discuss two types of evidence planners use. In a 1977 report, Daniel Kahneman and Amos Tversky identify one particular cognitive bias, the planning fallacy, which afflicts planners. Last updated on July 8th, 2021 at 01:31 pm
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