Even if our initial predictions were massively inaccurate, we still feel tethered to those numbers as we try to reassess. 6 When we draw up an initial plan for a project, we are biased to continue thinking in terms of those initial values-deadlines, budgets, and so on.Īnchoring is especially problematic if our original plans were unrealistically optimistic. Anchoring is the tendency to rely too heavily on early information when we are making decisions. It was coined by Muzafer Sherif, Daniel Taub, and Carl Hovland. We become anchored to our original planĪnchoring is another type of cognitive bias that plays a big role in the planning fallacy. While enthusiasm is certainly important for any venture, it can become toxic if it comes at the expense of being realistic. 3 Of course, this figure may well have been accurate for some individual students, but it is mathematically impossible for everybody to be in the top 16%.Īll of this means that when we set out to plan a project, we are likely to focus on imagined successful outcomes rather than potential pitfalls, and we are likely to overestimate how capable we (and our team members) are of meeting certain goals. On average, participants believed they would outperform 84% of their peers. As an example, take one study that asked incoming university students to estimate how they would perform academically, compared to their classmates. When it comes to our own capabilities, we are particularly bad at making accurate judgments. We have optimistic expectations of the world and other people we are more likely to remember positive events than negative ones and, most relevantly, we tend to favor positive information in our decision-making processes. 11,12 In general, we are oriented towards positivity. Simply put, the planning fallacy stems from our overall bias towards optimism, especially where our own abilities are concerned.