This is the second in an occasional series on the psychology (and philosophy) of decision making. I’m interested in this topic because, as a mediator, one of the things I do is to help people make good decisions (or at least, to understand the implications of their decisions).
Most of us make a huge number of decisions each day. A few are momentous; most seem trivial at the time. And yet trivial decisions, made over and over, can have a great effect – good or bad.
A friend of mine is doing some renovations on her house. She started last the summer, and the contractor promised her that she’d be back in her home by November.
I spoke to her at the end of January. The renovations weren’t finished yet. And she told me that she wouldn’t likely be back in her home before March.
My friend and her contractor fell victim to the planning fallacy. The same strategy underlies why people decide to declare war, why they start law suits, and why they end up exhausted and frustrated at the end of the week.
The Planning Fallacy
Simply put, the planning fallacy is our tendency to be over-optimistic when thinking about future task completions. We over-estimate the likelihood of things going smoothly and underestimate the possibility of things going sideways.
To put it another way, when it comes to our time management, we come to believe to be true what we hope to be true. The root of the problem is that we are simply not very good at thinking through compound probabilities (that is, the likelihood of two independent events occurring.) We can imagine one factor that might make a plan overly optimistic. But we are less likely to imagine multiple factors getting in the way of success.
Whether it is students completing an assignment, or shoppers going through their Christmas lists: Time and time again, psychologists have found that people under-estimate how long things will take. Even when psychologists ask for a “worst case scenario,” it ends up being optimistic, compared with actual completion times.
The planning fallacy helps us understand why people make high-risk choices: they are overly (and unrealistically) optimistic about their chances of success.
Making it Relevant
There are a few things we can do to manage risk and reduce the impact of the planning fallacy.
The first is to be honest about your past performance. If preparing for the holidays typically takes you the better part of a month, you aren’t likely to finish more quickly this year.
Another tactic is to look for statistics or other sources of independent information. My friend could have tried to find out what her contractor’s “on time” record was.
Finally, seek advice from a neutral third party or someone who has done the same thing and succeeded or failed. Find out what their challenges were, and what things came up that they couldn’t anticipate. Ask what they might do differently, if they had the chance to do things over.
Daniel Khaneman, Thinking Fast and Slow, Doubleday, 2011.
About the image:
Large clock on concourse of Waterloo station, London, with no hands and ‘out of service’ sign on it (March 2010). This image was originally posted to Flickr by HowardLake at https://flickr.com/photos/53941041@N00/4440585847. It was reviewed on by the FlickreviewR robot and was confirmed to be licensed under the terms of the cc-by-sa-2.0.