2. Mental Models

Overview

  • Planning Fallacy is just a manifestation of a more pervasive optimism bias
  • mostly hereditary behaviour
  • lots of benefits, but only for who don’t lose the real world view
  • One of the benefits is the ability to persist in spite of obstacles, but persistence often comes at a high cost
  • The optimistic risk of entrepreneurs risk contributes to the economic dynamism of capitalist society
    • even though in most of the cases the courage is not rewarded
  • explaining entrepreneurial optimism
    • wishful thinking
    • cognitive bias
      • Planning Fallacy
      • ignoring other people’s plans and skills
      • Illusion of control: we ignore luck’s role
      • focus on what we know and ignore what we don’t know
    • hybris