- cognitive bias resulting in predicting short timeframes for planned projects
- describe plans that:
- are not realistically close to ideal scenarios
- could be improved by looking at statistical data
- relates to the inside view
- the error arises from not considering distributional informations
- how to mitigate (reference class forecasting)
- identify an appropriate reference class
- get statistical data from the reference class and use them to generate a priori prediction
- adjust the prediction by using specific information for the case
See also
- Inside View Uses Specific Details, Outside View Uses Base Rates — the planning fallacy is what happens when only the inside view is used; reference class forecasting is the formalised outside view
- Correcting Intuitive Predictions Means Regressing Toward the Mean Proportionally to the Evidence Correlation — reference class forecasting is the same framework: start with the base rate (step 1), adjust by correlation (steps 3-4)
- Optimism Bias drives entrepreneurial dynamism but distorts risk assessment — the planning fallacy is a manifestation of optimism bias; the two are the same phenomenon at different levels of abstraction
- I sistemi battono gli obiettivi — reference class forecasting is a system: it removes the individual plan and replaces it with a process grounded in evidence