How to Beat the Planning Fallacy
One widely useful mental habit that we teach in our class at the Center for Applied Rationality is called reference class forecasting, and it’s for the most part, in the literature, been tested with reference to something called the planning fallacy, which is nearly universal. When we’re planning how long it’s going to take us to finish a project like a term paper or how long it’s going to take and how much it’s going to cost to build a bridge we systematically underestimate the total expenditure of time or money.
So reference class forecasting is a relatively simple correction you can make that leads to much more realistic estimates and all it is, is asking yourself instead of how long do I think it should take you ask yourself how long do things like this tend to take people. For instance, it’s going to be even more reliable information if you can think of how long has it taken me in the past to tackle term papers like this.
While reference class forecasting is especially useful for countering the planning fallacy, it can also be really useful for countering things like the mind projection fallacy where you assume that other people must be thinking like you. It can be really hard to shake the sense of like well they should feel like this because that’s how I would feel in their situation, but if you can think of examples of people in similar situations in the past and think of how they’ve reacted that can help counter your intuitive erroneous sense of how they should react in this situation.
In Their Own Words is recorded in Big Think’s studio.
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