Home > Attention, Decision Making, Metacognition > Under Budget and Over Time: The Planning Fallacy is Why You’re Always Behind Schedule

Under Budget and Over Time: The Planning Fallacy is Why You’re Always Behind Schedule

You are a busy college student who has a lot to do after a long day of classes. So you decide to try to organize your life and make a detailed schedule for your evening. You set aside an hour to get that workout in, and then another generous hour for dinner with your friends. Then to the library, you give yourself 45 minutes to read a history article and an hour to finish your lab report, followed

Evening Schedule

by an hour and a half for that chapter of chemistry notes. If all goes as planned, you’ll be back in your room snuggled up with Netflix by 11pm. The problem is, halfway through that chemistry chapter, you glance at your phone and it reads 11:43pm. What happened? You planned out everything you had to do and thought you had given yourself enough time to do it. Unfortunately, you have fallen victim to the planning fallacy.

 

The planning fallacy is a phenomenon first proposed in 1979 by Daniel Kahneman and Amos Tversky that says that you tend to underestimate the time it will take for you to complete a future task, which represents an optimistic bias, meaning an overconfidence in your ability to complete the task within the given time. This also applies to predicting the budget for a project you are working on. However, the planning fallacy also says that when predicting for someone else, we tend to overestimate the time and budget required to complete a task, which represents a pessimistic bias, which is an underconfidence in your ability to complete the task within the given time. A possible explanation for this difference is that we may have greater expectations for ourselves than for others. These phenomena hold true regardless of one’s past experiences with similar tasks. One reason for the planning fallacy is a failure to consider obstacles that may slow down progress on a task.

Representation of My Life http://theincidentaleconomist.com/wordpress/wp-content/uploads/2014/08/planning-fail.jpg

Within your perfectly planned evening, you failed to realize that you’d want to take a shower after your workout. Then, while trying to print your history article, the printer was out of paper and you had to walk over to the info desk to ask for more paper. These unexpected setbacks, along with each task taking slightly longer than you predicted, led to a much longer night than you had anticipated. However, you did do one thing correctly in planning out your night, which was to divide your evening into individual tasks like working out and reading an article. In 2008, Forsyth and Burt conducted a study to test how the segmentation effect impacts predicting completion times on future tasks. Segmentation is when you divide a single large task into smaller subtasks and then allocate time to each subtask rather than the single large task as a whole. By summing the times for each subtask, you can figure out how long the larger task will take. They found that this method significantly reduces the planning fallacy because the summation of time estimates for the segmented tasks was longer than the estimated time for the single larger task, and this more accurately represents the time it will take to complete a task. To read more about this study, click here. The implications of this study are that by dividing a large task, such as “homework,” into several smaller tasks, such as “chemistry notes, history article, etc.,” one can possibly reduce the effects of the planning fallacy.

You can also improve your time predictions for future tasks by taking advantage of the idea that you tend to overestimate when predicting times for other people. Buehler et al. (2012) examined how visualizing someone else doing a certain task instead of you can reduce the planning fallacy. They found that when people used third person imagery when predicting completion times, they generally considered more possible setbacks and thought less about motivational sources of bias such as one’s desires to complete a task more quickly. This technique can therefore be used to reduce the impact of the planning fallacy and more accurately predict task completion times. For example, if you have a friend in the same class, you can try to imagine how long it would take for them to complete the assignment to estimate how long it will take you. For more information about this study, click here.

However, it’s important to note that the planning fallacy doesn’t impact everyone in every situation. Rodon and Meyers (2012) conducted a study based in the Netherlands that looked at how the planning fallacy impacted individuals’ time estimations to finding answers using Web searches. What they found is quite interesting. When predicting times and performing Web-based search tasks, Rodon and Meyers found that individuals actually showed a pessimistic planning fallacy, in that they overestimated the time it would take them to find answers on the Web. This was an interesting result, considering that people usually display optimistic time estimations for completing tasks. One possible explanation for the appearance of a pessimistic planning fallacy is that users understand that they do not have full control over the Internet. Sometimes the Internet is slow or the connection fails, and so this lack of control causes people to make more cautious time estimations for how long it will take them to obtain information on the Web. When we have a task to do, we often think that we have full control over how fast we can complete it and do not account for unanticipated complications, and thereby end up underestimating the time needed to complete the task. The researchers also found that short task length, a variability of task difficulty, and whether the answer is qualitative, such as a general fact or quantitative, such as a price for something, all contributed to the overestimation in task completion times (Rodon & Meyers, 2012; to read more about this study, click here).

The planning fallacy isn’t just responsible for you getting to bed later than you’d hoped. It can happen in large-scale projects as well, which can have more significant consequences. One such example is in the construction of the Sydney Opera House in Sydney, Australia.

The Sydney Opera House https://media.timeout.com/images/103085276/630/472/image.jpg

Construction at the site began in 1959 with an expected completion date of 1963 and estimated budget of $7 million. The Opera House was officially completed in 1973 and ended up costing $102 million. This gross underestimation in both time and budget for this structure was due in large part to unexpected difficulties that the planning crew had failed to take into account, such as inclement weather during which they could not work and changes in the original contract documents (https://en.wikipedia.org/wiki/Sydney_Opera_House).

Another example that occurred in the United States was the construction of the Denver International Airport. It is currently the largest airport in the country by total land area, but it opened sixteen months later than was originally scheduled, reportedly due to poor planning and design changes. In addition,

Inside View of Denver International Airport http://www.denverpost.com/wp-content/uploads/2016/07/denver-international-airport-terminal.jpg

and perhaps more significant, is that the project cost $4.8 billion, nearly double the allocated budget! While often resulting in grand and iconic structures, projects such as the Sydney Opera House and the Denver International Airport come with a price, not just in actual cost, but in terms of labor and time as well.

But what does any of this have to do with cognitive psychology? Well, in order to plan out your day, you must engage in metacognition, which involves thinking about how much you know. People with good metacognition will likely be less impacted by the planning fallacy because they have good awareness of their capabilities and how they will perform. The planning fallacy can also be related to attention, because our time predictions are likely assuming that we direct our full attention to the task that we are working on. However, distractions are inevitable, and when we shift even part of our attention away from the present task, we become less productive on that task, causing it to take more time to complete.

So, now you’ve learned about the planning fallacy, and how you are probably subject to it every day. Hopefully in the future, when you schedule out your busy evening, you’ll be sure to plan for unexpected obstacles and always give yourself more time than you think you’ll need to complete a task.

Basic Gist of the Planning Fallacy https://blogassets.plan.io/planning-fallacy.png

If you don’t think you’ll be able to reduce the planning fallacy on your own, you can do what I did and give your friend your weekly schedule as well as a list of everything you have to do during the week and when all of your assignments are due, and have your friend plan every hour of your day. Guess what? It worked for me, and I felt really efficient all week because I wasn’t constantly going over my allotted time for every task. Instead, I often finished my assignments before the allocated time was up, which meant I could either get started on the next assignment (haha just kidding, I was obviously watching Netflix) or have a few minutes to relax and reward myself for beating the planning fallacy.

For a related article on metacognition and recognizing one’s abilities to perform a task, check out this great post on the Dunning-Kruger Effect!

 

References

Buehler, R., Griffin, D., Lam, K. H., & Deslauriers, J. (2012). Perspectives on prediction: Does third-person imagery improve task completion estimates?. Organizational Behavior And Human Decision Processes, 117(1), 138-149. doi:10.1016/j.obhdp.2011.09.001

Forsyth, D. K., & Burt, C. B. (2008). Allocating time to future tasks: The effect of task segmentation on planning fallacy bias. Memory & Cognition, 36(4), 791-798. doi:10.3758/MC.36.4.791

Rodon, C., & Meyer, T. (2012). Searching information on the Web and Planning Fallacy: A pilot investigation of pessimistic forecasts. European Review Of Applied Psychology / Revue Européenne De Psychologie Appliquée, 62(2), 103-109. doi:10.1016/j.erap.2011.12.004

  1. April 26th, 2017 at 21:51 | #1

    Hey FenDog, awesome post!! I really did find myself thinking about all of the times when I severely underestimated how much time it would take to cool-down, ice-bath, and shower to make it to Dana on time. It would be interesting to see if people still fall victim to the planning fallacy when predicting how much time it would take them to do something they have done many times in the past. For example my mom has driven the same route to work everyday for 10 years. If we were to test something like this I predict that she would be better at predicting how much time she would need to go from waking up in the morning to sitting down at her desk. However I also think that because this must be such an automatic process, she is not aware of how much time it would take, given the automatic nature of her morning routine. What do you think?

  2. Katie Fenton
    May 2nd, 2017 at 14:52 | #2

    Thanks for your comment, Rudy! The current research shows that people still tend to underestimate times needed for tasks that they have previous experience with. However, I believe this generally applies to controlled processes. With a task that is so familiar that it has become automatic, such as your mom’s morning routine which she has performed for the past decade, it certainly makes sense that she would just know what time every day she needs to wake up and leave the house by in order to make it to work on time. However, does her route to work usually involve heavy traffic? If so, how much extra time does she allow herself to get through traffic? Are there some days of the week that she knows will have more traffic than others? What about road construction during certain parts of the year? It would, indeed, be interesting to look at how/if the planning fallacy plays a role in automatic processes, and I think you’re right, that once a task becomes automatic, that people are less likely to be influenced by the planning fallacy when completing those tasks. @Anna Rudinski

  3. May 2nd, 2017 at 22:29 | #3

    I used to work at a modest t-shirt factory in Baltimore and one Friday I had to ask my manager if I could leave early to go to Philadelphia to go to my girlfriend’s sorority formal. Philly is 2 hours away (2:45 with traffic). I got off at 4 normally and her formal started at 6. I explained the situation to my manager and asked if I could get out half an hour early and my manager said no. She said I would have to leave at noon if I wanted to get there in time. She told me to calm down and plan to get there reasonably and not under stress. She, a large old african american with a southern belle attitude, told me, a young college bound stressed out white kid, what I should have been able to tell myself; to take my time- make time for lunch, gas, traffic, changing, etc.

    You mentioned that you underestimate the time it takes to complete a task, while others might overestimate the time it takes you to complete a task, but this seemed like an extreme case and it got me thinking about the role of culture in the Planning Fallacy and other things that might predispose you to fall victim to the planning fallacy. I wasn’t able to find anything about culture in the planning fallacy literature but I’m curious if you have seen anything on that or on race/socio-economic/age/geographic differences that might have an impact on this fallacy? If not do you think we might be on to something here?

    Great article by the way, I’ve never met someone who has mastered this fallacy.

  4. Katie Fenton
    May 3rd, 2017 at 20:58 | #4

    Thanks for your comment, Jack! I think a study to see how different independent variables such as age, race, or socioeconomic status may influence the planning fallacy is a great idea! Most of the studies that I have seen have been with high school or college students, so an experiment with a larger range of ages doing tasks other than school projects would definitely be cool to see. A large factor in the planning fallacy is that people tend to assume that their plans will be executed flawlessly without encountering any setbacks. Therefore, I can see how something such as socioeconomic status, when associated with a sense of lacking power or control, could affect how much people are influenced by the planning fallacy if they know not to expect everything to go perfectly as planned.@John Burton

  5. May 8th, 2017 at 16:44 | #5

    Great post, it’s certainly super relatable! Right before I read this, I finished making a very detailed, color organized schedule for my finals week. Needless to say, I was immediately drawn to this post! In high school, when I would write homework into my planner, I would also write how long I expected each task to take me. Sometimes, I would be accurate, and other times I definitely was NOT! I started to realize that when a task did actually take me as long as I thought it would, it was because I would “overestimate” how long it would take when writing it into my planner. I would throw some extra minutes onto the time, “just in case.” So when I read in your post that it’s possible improve your time predictions for tasks by thinking about how one tends to overestimate when predicting times for other people, it made sense that by overestimating how long it would take me, I found that my overestimations were actually pretty accurate estimations. This idea of the planning fallacy also made me think about metacognition in that, good metacognition leads a person to do better on exams, because they are able to know what they know and don’t know. So for this, I related it to metacognition because in order to beat the planning fallacy one must think about their thinking rationally and truthfully, in order to successfully allocate time and plan. Going back to that schedule I just made – I didn’t even put time allocations on it, but I did think about doing so! I looked at the tasks I had to complete today and there were 4 of them, so I thought to myself that each task would take an hour. I think I overestimated enough, so I can’t wait to see if I’m right!

  6. cthutc20
    May 8th, 2017 at 20:35 | #6

    Hello, I think your post is really interesting because it is something most college students can relate to. Almost daily, I find myself falling far behind the schedule that I planned for myself, often because I underestimate how long I will be able to focus on homework before I start scrolling through Facebook or Instagram, or have to run across campus to do something I forgot about. I think it is really helpful to understand that we underestimate how much time we need to complete something, but we can use our friends to help plan our schedule since they overestimate the time it takes others to complete tasks. It is very stressful when you plan on going to bed by 11 PM and still are not done with your work by Midnight! This made me think of how theories on attention could possibly relate the planning fallacy, such as the capacity framework model (Kahneman, 1973). Attention is understood as a limited and selective resource, and while doing our work we have to choose where to shift our attention, and direct more attentional resources based on how difficult it is. But, the cocktail effect shows that while we block information we are not attending to, if it is very significant, or a very sudden, loud, or unexpected event can make our attention shift. Therefore, it can be difficult to keep our attention focused on the task at hand, and it therefore may take longer. Also, some of the studies we looked at, such as Drew et al. (2013), showed that since attention is a limited resource, when we try to perform more than one task at once, such as driving and talking on the phone, it lowers our performance on both tasks. So you may think that you can talk to your friend or watch a video while doing work, but this in fact lowers your ability, making it take longer because you have to allocate less attention. The study also shows the importance of meta-cognition, your awareness and understanding of your thought process. In the case of the planning fallacy, meta-cognition i important because if you understand that you underestimate how long it takes you to do something, you can later your plan by giving yourself more time or having a friend allocate the time, so that you have a better schedule that you can stick to. This is also shown in the Rodon & Meyers (2012), where they used the idea of meta-cognition that internet could be slow and therefore looking something up online could take longer, to describe why the results showed participants had a pessimistic bias that it would take longer to look something up then it actually did.

  7. jbperlmu
    May 11th, 2017 at 02:09 | #7

    This post is super relatable – especially as I write this post during finals week at 2 o’clock in the morning. Clearly, I underestimated how long all of my work would take and underestimated the speed at which I could complete these tasks. While it is hard to relate this directly to something that we learned in class, it did make me think a little bit about our attentional capacity. In addition to everything you mentioned in your post, I think another one of the reasons that we are always behind is because of our false belief that we are good at “multitasking.” In reality, based on what we know about attention, attention to “thing B” takes away from your attention to “thing A.” Because of this, we are not as productive as we should be, and I can imagine that would set us backwards in our time budgeting. This also reminded me a little bit about our memory biases and the 7 sins of memory. Not that planning a time schedule relates directly to memory, but we clearly are not that realistic about our past (memories), and our future (planning). Just like our impaired memory influences us in many ways, our inaccurate expectations about the future also affect us!

  8. May 11th, 2017 at 17:26 | #8

    This is not only a very interesting article, but it also contains some valuable information! As a college student myself, I also find it difficult to budget my time. I have noticed that I tend to overestimate the speed with which I can complete tasks. There are many times I have fallen prey to the fallacy effect, and obtaining a better understanding of it is very helpful!

    While reading this article, I started thinking about how I could better schedule my own day in order to be the most efficient student possible. I started thinking about how we tend to use segmentation to divide our day into more controllable chunks. For me, using segmentation is actually counterproductive because instead of fully focusing and engaging with the task at hand, I tend to become distracted and start stressing about getting the task at hand done, and I start thinking ahead to the next task. My lack of focus on the task at hand is concerning because according to the capacity framework model, attention is a limited resource and if you devote attention elsewhere then you will have less attention to devote to the task at hand. I see now that the planning fallacy causes me to become even more distracted. Because I tend to overestimate the speed with which I will be able to complete a task, and don’t account for unexpected distractions that will slow me down, I get even more behind than I could ever have anticipated. This leads me to become even more stressed and look at the clock constantly, leaving me a stuck in a vicious cycle. This is just a theory, and I am sure that it depends on the individual, but I wonder if for some people segmentation might actually be counterproductive. I guess all brains are different, and mine just doesn’t allow me to work under too much pressure.

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