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The Planning Fallacy
Abstract
The planning fallacy refers to a prediction phenomenon, all too familiar to many, wherein people underestimate the time it will take to complete a future task, despite knowledge that previous tasks have generally taken longer than planned. In this chapter, we review theory and research on the planning fallacy, with an emphasis on a programmatic series of investigations that we have conducted on this topic. We first outline a definition of the planning fallacy, explicate controversies and complexities surrounding its definition, and summarize empirical research documenting the scope and generality of the phenomenon. We then explore the origins of the planning fallacy, beginning with the classic inside–outside cognitive model developed by Kahneman and Tversky [Kahneman, D., & Tversky, A. (1979). Intuitive prediction: biases and corrective procedures. TIMS Studies in Management Science, 12, 313–327]. Finally, we develop an extended inside–outside model that integrates empirical research examining cognitive, motivational, social, and behavioral processes underlying the planning fallacy.
... First, prior research indicates that the planning fallacy leads to an underestimation of risks, as individuals prone to this bias tend to focus on the future and ignore past experiences (Kannadhasan et al., 2014;Keh et al., 2002). In other words, focusing on the completion of a target event, such as establishing a business, may lead an individual to underestimate the risk that some other event will occur (Buehler et al., 2010;Kahneman and Lovallo, 1993). Similarly, entrepreneurship education has been found to enhance risk taking (Sánchez, 2011(Sánchez, , 2013, which indirectly influences entrepreneurial intentions through changes in attitudes (Ajzen, 1991;Lüthje and Franke, 2003). ...
... Second, the planning fallacy leads to overestimations of the benefits of an action (like starting a business). When individuals are asked to predict future scenarios based on 'best guess' scenarios, their predictions are generally not distinguishable from those generated by 'best case' scenarios (Buehler et al., 2010;Griffin et al., 1990). Thus, estimations for completion of a certain task or the likelihood of success of a new venture are likely to be overly optimistic if they are solely based on future scenarios (Buehler et al., 2010;Kannadhasan et al., 2014). ...
... When individuals are asked to predict future scenarios based on 'best guess' scenarios, their predictions are generally not distinguishable from those generated by 'best case' scenarios (Buehler et al., 2010;Griffin et al., 1990). Thus, estimations for completion of a certain task or the likelihood of success of a new venture are likely to be overly optimistic if they are solely based on future scenarios (Buehler et al., 2010;Kannadhasan et al., 2014). This may lead to positive perceptions of becoming an entrepreneur, which might change personal attitudes toward the behaviour -an antecedent of entrepreneurial intentions. ...
... First, prior research indicates that the planning fallacy leads to an underestimation of risks, as individuals prone to this bias tend to focus on the future and ignore past experiences (Kannadhasan et al., 2014;Keh et al., 2002). In other words, focusing on the completion of a target event, such as establishing a business, may lead an individual to underestimate the risk that some other event will occur (Buehler et al., 2010;Kahneman and Lovallo, 1993). Similarly, entrepreneurship education has been found to enhance risk taking (Sánchez, 2011(Sánchez, , 2013, which indirectly influences entrepreneurial intentions through changes in attitudes (Ajzen, 1991;Lüthje and Franke, 2003). ...
... Second, the planning fallacy leads to overestimations of the benefits of an action (like starting a business). When individuals are asked to predict future scenarios based on 'best guess' scenarios, their predictions are generally not distinguishable from those generated by 'best case' scenarios (Buehler et al., 2010;Griffin et al., 1990). Thus, estimations for completion of a certain task or the likelihood of success of a new venture are likely to be overly optimistic if they are solely based on future scenarios (Buehler et al., 2010;Kannadhasan et al., 2014). ...
... When individuals are asked to predict future scenarios based on 'best guess' scenarios, their predictions are generally not distinguishable from those generated by 'best case' scenarios (Buehler et al., 2010;Griffin et al., 1990). Thus, estimations for completion of a certain task or the likelihood of success of a new venture are likely to be overly optimistic if they are solely based on future scenarios (Buehler et al., 2010;Kannadhasan et al., 2014). This may lead to positive perceptions of becoming an entrepreneur, which might change personal attitudes toward the behaviour -an antecedent of entrepreneurial intentions. ...
... The phrase refers to the pervasive human tendency to hold "the conviction that a current project will go as well as planned even though most projects from a relevant comparison set have failed to fulfill their planned outcomes." Controlled experiments have repeatedly validated the phenomenon (Buehler, Griffin, & Peetz, 2010). ...
... Management and social scientists have explored the planning fallacy's operations and implications specifically in business Flyvbjerg, Lovallo, & Kahneman, 2003) and major infrastructure projects (Flyvbjerg, Garbuio, & Lovallo, 2009). Many of the problems they found in particular cases traced to faulty decisions related to the planning fallacy (Buehler, Griffin, & Peetz, 2010). ...
... It is extremely difficult to see it in ourselves, and the practically minded people who predominate in decisions regarding acquisition programs seem particularly resistant to such introspection. But we can see it outside of ourselves, if we are able to look dispassionately, and that offers an important clue about what might be done to mitigate its ill effects (Buehler et al., 2010). ...
... People are often inaccurate and biased when estimating duration. This is true both for estimations of past task duration (Block & Zakay, 1997;Fraisse, 1963;Ornstein, 1969;Poynter, 1989;Wallace & Rabin, 1960) and future task duration (Buehler, Griffin, & Peetz, 2010;Halkjelsvik & Jørgensen, 2012;Roy, Christenfeld, & McKenzie, 2005). There appear to be a number of similarities in when and where estimations of past and future task duration are likely to be biased due to factors such as the actual task duration and familiarity with the task (Roy et al., 2005;Roy & Christenfeld, 2007Roy, Christenfeld, & Jones, 2013;Thomas, Handley, & Newstead, 2004. ...
... The focus of research on retrospective time estimation generally involves theoretical mechanisms that are relevant to estimating duration, such as attention and memory storage (Block & Zakay, 1997;Grondin, 2010). Research on future task duration, while still theoretically grounded, tends to focus more on interventions that could improve predictive accuracy (Buehler et al., 2010;Halkjelsvik & Jørgensen, 2012;Roy et al., 2005). For example, research has examined techniques such as having participants try to think about all the subcomponents of a task before estimating how long it will take them to complete the full task (unpacking: Kruger & Evans, 2004) and supplying participants with the duration of another relevant task before estimating task duration (anchoring: König, 2005). ...
We examined whether or not interventions that have been used to try to influence predictions of future task duration-unpacking, summing and anchoring-had a similar effect on retrospective estimations of duration. In three studies, participants experienced a number of short stimuli, such as watching videos, before estimating the duration for each of the stimuli and the overall duration. The first estimation given served as an anchor for all following estimates. If the first estimation was highly biased in one direction, then subsequent estimates were more likely to also be biased in the same direction. Additionally, separate estimates for a number of individual tasks differed from the estimates for all of the tasks combined. This incongruity happened even though all estimates were given in sequence. Overall, results indicated that memories of past task duration could be influenced by the manner in which they were elicited.
... Time prediction is another example of a "quasi-probabilistic" estimation task, since estimating the time or duration of a future event is related to estimating the probability that the event will fall before or after a certain moment in time. Several studies have been conducted where participants were asked to predict the time it will take them to complete a task (e.g., an academic project or an assignment), and where predictions were compared with actual outcomes [53]. These studies consistently show that people tend to be overly optimistic in their predictions irrespective of their past experience, a bias called the planning fallacy [53]. ...
... Several studies have been conducted where participants were asked to predict the time it will take them to complete a task (e.g., an academic project or an assignment), and where predictions were compared with actual outcomes [53]. These studies consistently show that people tend to be overly optimistic in their predictions irrespective of their past experience, a bias called the planning fallacy [53]. ...
—Information visualization designers strive to design data displays that allow for efficient exploration, analysis, and
communication of patterns in data, leading to informed decisions. Unfortunately, human judgment and decision making are imperfect
and often plagued by cognitive biases. There is limited empirical research documenting how these biases affect visual data analysis
activities. Existing taxonomies are organized by cognitive theories that are hard to associate with visualization tasks. Based on a
survey of the literature we propose a task-based taxonomy of 154 cognitive biases organized in 7 main categories. We hope the
taxonomy will help visualization researchers relate their design to the corresponding possible biases, and lead to new research that
detects and addresses biased judgment and decision making in data visualization.
... teams pace themselves according to the time allocated and transfer this pace to later moments in time (harrison, mohammed, mcGrath, Florey, & vanderstoep, 2003). product development projects are notorious for running overtime (Buehler, Griffin, & peetz, 2010). third, because time is part of a process and used as a resource, it has acquired the meaning and function of providing structure. ...
... present-oriented people are more impulsive, a trait associated with distraction (steel, 2007), and are particularly vulnerable to choosing the closest option in time (reacting to a perceived immediate demand at the cost of procrastinating on other items) (van eerde, 2000). in line with construal level theory (liberman & trope, 2008), longer term predictions tend to be more abstract, and predictions on future performance rely on temporal distance. the further away in the future, the less contextual information is taken into account, which is one of the mechanisms leading to overly optimistic planning (Buehler, Griffin, & peetz, 2010). time horizons matter to progressing mne entrepreneurial initiatives because of the greater uncertainty in early stages of the initiative as opposed to later stages. ...
... Cassar (2010) suggère que l'élaboration d'un plan d'affaires et de prévisions financières tend à renforcer l'optimisme exagéré de l'entrepreneur au travers d'une vision interne du projet (Kahneman et Lovallo, 1993) caractéristique du biais cognitif connu comme « planning fallacy » . Ce biais est caractérisé par une sousestimation du temps et des ressources nécessaires à la conclusion d'un projet (Buehler, Griffin et Peetz, 2010). ...
... Tout d'abord, il faudrait créer des configurations institutionnelles où le porteur de projet soit confronté à une diversité d'acteurs susceptible de générer des avis différents et contradictoires, afin de balayer le champ des possibles dans une optique de réduction du risque d'échec et d'augmentation du potentiel du projet. Cette confrontation est en phase avec les recommandations de pour susciter une vision externe du projet afin d'éviter les biais associés au phénomène de « planning fallacy » (Buehler, Griffin et Peetz, 2010). De plus, cela permettrait au porteur de projet de prendre du recul par rapport à ladite expertise d'un seul accompagnateur, évitant ainsi que celui-ci provoque une accélération ou un ralentissement exagéré du processus de création. ...
Cet article interroge l’accompagnement à partir d’une réflexion de fond sur la prise de décision et de risque en entrepreneuriat. En adoptant une approche abductive et pragmatique basée à la fois sur notre expérience dans l’accompagnement et sur une articulation approfondie de trois corpus théoriques distincts, nous présentons une vision dynamique du processus de création d’entreprise dans laquelle un porteur de projet accompagné doit prendre des décisions face à l’incertitude et à son évaluation du risque, et cela malgré les limites de sa rationalité. Les décisions et les actions qui en découlent auront des conséquences dont une partie sera imprévisible et non-intentionnelle, mais qui auront tout de même un impact sur les dialogiques porteur/projet, projet/accompagnateur et porteur/accompagnateur. A partir de cette mise en perspective nous discutons trois dérives possibles des systèmes d’accompagnement sur la prise de décision et de risque en création d’entreprise : le retrait face à l’expertise de l’accompagnateur, la soumission aux contraintes imposées par les systèmes d’accompagnement même aux dépens du projet et de son porteur et la possible altération temporelle inadéquate du processus entrepreneurial. Nous concluons en évoquant quelques pistes de réflexion pouvant aider à éviter ces dérives et pouvant constituer d’intéressantes voies de recherche future.
... In this research, we suggest that both HSC and LSC individuals express a certain "planning fallacy" (Buehler et al., 1994(Buehler et al., , 2010. This fallacy occurs because distant future situations are interpreted differently than near future situations. ...
... LSC individuals may be more likely to engage in effortful tasks in the distant than in the near future not only because of their tendency to avoid or delay effortful tasks, but also because they experience lower SSE in the near than in the distant future. When it comes to deciding whether to engage in a future effortful task or not, LSC individuals' "planning fallacy" (Buehler et al., 2010) expresses an optimistic-bias toward future events. Optimism bias in the context of planning ahead tasks suggests that individuals are more optimistic about successfully completing tasks, and about how long those tasks would take, for distant future tasks compared with near future tasks (Buehler et al., 1994;Buehler and Griffin, 2003). ...
Self-efficacy constitutes a key factor that influences people's inclination to engage in effortful tasks. In this study, we focus on an interesting interplay between two prominent factors known to influence engagement in effortful tasks: the timing of the task (i.e., whether the task is scheduled to take place in the near or distant future) and individuals' levels of self-control. Across three studies, we show that these two factors have an interacting effect on self-efficacy. Low self-control (LSC) individuals report higher self-efficacy for distant-future effortful tasks than for near-future tasks, whereas high self-control (HSC) individuals report higher self-efficacy for near-future tasks than for distant future tasks. We further demonstrate how self-efficacy then molds individuals' willingness to engage in those effortful tasks. Given that a particular task may comprise effortful aspects alongside more enjoyable aspects, we show that the effects we observe emerge with regard to a task whose effortful aspects are salient and that the effects are eliminated when the enjoyable aspects of that same task are highlighted.
... 415). Planning fallacy happens as soon as the individual ignores his/her past experience and performance and adopts his/her internal perspective, i.e. maintaining their optimism about the current project in the face of historical evidence to the contrary (Buehler et al., 2010;Pychyl et al., 2000). ...
... Note. "mi is the number of media typically used while using primary medium i, hi is the number of hours per[day] reportedly spent using primary medium i, and htotal is the total number of hours per [day] spent with all primary media"(Ophir et al., 2009, p. 15586).For measuring planning fallacy, the author constructed the scale based on conceptual comprehension from previous studies(Buehler et al., 2010;Buehler, Griffin, & Ross, 1994;Koole & van't Spijker, 2000;Pezzo, Pezzo, & Stone, 2006;Pychyl et al., 2000). Among others, the dimensions are optimism, imposing a deadline, ignorance of the past mistakes (of similar tasks), confidence in resources, and self-representation. ...
Some adverse effects of procrastination are anxiety, tension, loss of valuable opportunities, as well as the breakdown of relationships with other people. This study assumed that procrastination is learned. Procrastination can be avoided by identifying its predictors; the question is: Are courage, media multitasking, and planning fallacy able to predict the decisional procrastination? The purpose of this study was to test the following hypotheses: (1) Courage can predict decisional procrastination in the negative direction; (2) Media multitasking can predict it in a positive direction, and (3) Planning fallacy can predict it in a positive direction. Participants of this study were 192 university students in the Greater Area of Jakarta, the capital of Indonesia (116 males, 76 females; mean of age = 20.77 years old; standard deviation = 3.02 years) recruited using convenience sampling technique. The research data were obtained through questionnaires in Indonesian and analyzed using multiple linear regression analysis. Multiple linear regression analysis showed that our model can explain the decisional procrastination, with Rsquare = 6.4%. This study found that (1) The higher one’s courage, the lower his/her decisional procrastination, (2) Media multitasking and planning fallacy cannot predict it. Since the planning fallacy is laden with cognitive processes, courage has a dominant affective or behavioral attitudinal nuance, and media multitasking can be viewed as a psychomotor variable; the current study concludes that the affective variable is the principal thing to be intervened to prevent or stop the decisional procrastination.
... A teaching team which completes its curriculum documentation by working late into the night the day before it is due has likely fallen victim to the planning fallacy, defined as the tendency 'to underestimate the time required to complete a project, even when we have considerable experience of past failures to live up to planned schedules' (Kahneman and Tversky 1982b). The planning fallacy can be observed in major public building and infrastructure projects as well as in more prosaic instances such as academics writing a text book (Kahneman 2011, 245-247), or psychology students completing their masters dissertations (Buehler, Griffin, and Peetz 2010). The planning fallacy is not merely underestimating how long a task will take, but doing this when we have reliable information from our own or others' experience that the task will take much longer. ...
... Research on the planning fallacy has led to numerous suggestions for its avoidance (Kahneman and Tversky 1982b;Buehler, Griffin, and Peetz 2010). A critical step for academics or teaching teams redesigning assessment tasks would be to estimate time needed based on past experience of similar tasks, not on an overly optimistic forecast of their forthcoming work, that is, they should adopt an 'outside' view. ...
Despite widespread recognition of the need to improve assessment in higher education, assessment tasks in individual courses are too often dominated by conventional methods. While changing assessment depends on many factors, improvements to assessment ultimately depend on the decisions and actions of individual educators. This paper considers research within the ‘heuristics and biases’ tradition in the field of decision-making and judgement which has identified unconscious factors with the potential to limit capacity for such change. The paper focuses on issues that may compromise the process of improving assessment by supporting a reluctance to change existing tasks, by limiting the time allocated to develop alternative assessment tasks, by underestimating the degree of change needed or by an unwarranted overconfidence in assessment design decisions. The paper proposes countering these unconscious limitations to change by requiring justification for changing, or not changing, assessment tasks, and by informal and formal peer review of assessment task design. Finally, an agenda for research on heuristics and biases in assessment design is suggested in order to establish their presence and help counter their influence.
... Planning allows workers to collaborate efficiently on multiple projects [3], to spend time on the tasks that matter to them most [4], and to ensure they spend quality time away from work to recuperate from work stress [5]. Yet, despite the fact that regular planning at work is beneficial, knowledge workers still experience challenges getting into the habit of planning [6], making realistic plans [7], and sticking to these plans [8]. A study that measured how accurately knowledge workers plan their work found that they left 27% planned work incomplete by end of the day [9]. ...
... To compare with previous literature, [9] found that 27% of tasks were not completed. These findings are in line with general optimistic attitude in planning [7]. ...
Reliable and accurate planning is essential for modern knowledge workers. However, there is limited insight about when, how and why planning is inaccurate, and the circumstances in which those inaccuracies are troublesome. To investigate this, we asked 20 academics to keep a diary for a single work day. They estimated the duration of the tasks they wanted to achieve at the start of the day and noted down in detail the tasks they actually achieved during the day. Semi-structured interviews were conducted to complement this diary data. The diaries showed that some tasks, such as email and coding, were more susceptible to time underestimation bias while other tasks, such as writing and planning, were more susceptible to time overestimation bias in planning. Based on interviews, a typology of common reasons for delays in planned daily work is presented. It suggests that vague and optimistic planning leads to the observed discrepancy between planned and actual work. Finally, interviews suggested that participants adopted four planning strategies that vary in the frequency of planning, from minimal planning to daily, weekly and multi-level planning. We close by discussing ways support systems for accurate planning can be better designed for different use cases.
... Along similar lines, people underestimate how much they will spend in a coming week, even if they know that they typically spend more than the predicted amount (Peetz & Buehler, 2009). These findings are in line with a host of studies on the planning fallacy, many of which suggest that people grossly underestimate the amount of time a given future task will take because they fail to adequately take into account past task completion times (e.g., Buehler, Griffin, & Peetz, 2010;Buehler, Griffin, & Ross, 1994). ...
... In understanding the reasons underlying the planning fallacy, Buehler, Griffin, and Peetz (2010) have suggested that people are likely to take one of two approaches to making predictions: the inside view and the outside view (e.g., Kahneman & Lovallo, 1993). When adopting the "inside view," people are likely to consider the specific aspects of a given case at hand, making it all the more likely that they will see that particular instance as unique. ...
Consumer prediction encompasses the cognitive, affective, and motivational psychological processes by which consumers anticipate (and subsequently produce) the future. Prediction is a pervasive factor in consumer decision making, from everyday decisions such as which lunch one should purchase to major decisions about how much one will need to save for retirement. More generally, predictions are the method by which consumers determine which choice options will bring them the greatest satisfaction in the present and by which they anticipate their needs and wants in the near and distant future. In this chapter, we examine the processes by which consumers infer whether and what will happen in the future, the accuracy of their predictions, their antecedents, and consequents. We (i) review the two dimensions of prediction that have been most studied, utility and psychological distance, and how they combine to determine the perceived value of prospects (choice options). We (ii) discuss innovative research on these topics over the last decade, and (iii) end with important open questions and promising future directions.I. Dimensions of Prediction Guided by the evaluation of prospective (future) events in terms of their expected value (Kahneman & Tversky, 1979; Von Neumann & Morgenstern, 1947), the two dimensions of prediction typically studied by consumer psychologists are (a) the utility of future events and (b) their probability of occurrence. In this chapter, we discuss these two dimensions of prediction in terms of their recently refined and expanded definitions. Specifically, we review the concept of utility in terms of a refined definition that distinguishes between indirect and direct measures of utility. We review the concept of probability as an instance of a broader dimension of psychological distance, which also includes time, physical space, and more abstract forms of distance such as social connection.Utility Utility is a measure of the value of a stimulus that typically connotes the total pleasure or pain associated with its anticipation, experience, and recollection. Consumer prediction research typically examines two kinds of utility associated with a future event: its decision utility and its predicted utilit (Kahneman, Wakker, & Sarin, 1997; Morewedge, in press; Shiv & Huber, 2000). Decision utility refers to relative preference that people exhibit for different stimuli, measured through indirect methods such as observing which stimulus they choose when given a choice of stimuli and their willingness to pay for a stimulus
... In this research, we suggest that the number of budget categories considered for spending and saving needs will influence consumers' budget estimation. According to the support theory, consumers are more likely to pay attention to and estimate that a given future event/outcome would happen when described in more detail (i.e., prediction bias, see Buehler et al. 2010;Tversky and Koehler 1994). By extending these findings, another stream of research shows the so-called unpacking effects in various domains, such that consumers tend to have a lower estimate for an overarching category than the sum of their estimates for all subcategories (Rottenstrich and Tversky 1997;Savitsky et al. 2005;Kruger and Evans 2004). ...
... According to the goal-setting theory, when consumers experience conflicts between goals and possible obstacles, they are more likely to set goals with commitment (Gollwitzer et al. 2010;Gollwitzer and Oettingen 2011). This occurs because such conflict offers a chance for consumers to elaborate on their subjective perception of goal pursuit matched with the objective situation of goal pursuit, thereby leading them to set goals with commitment (Buehler et al. 2010). Furthermore, when conflicts arise between short-and long-term goals, consumers tend to exercise self-regulation to pursue long-term goals by actively perceiving long-term goals as more important (Fishbach and Trope 2005). ...
This research explores how consumers plan for their personal finances, focusing on the simultaneous effects of spending and saving needs in budget-setting. The current research proposes that the number of budget categories and salient savings goals interactively influence consumers’ budget estimation. In two lab studies, we showed that participants with a salient savings goal tend to experience conflicts when they have the same (vs. different) number of budget categories for spending and saving needs, thereby perceiving the increased savings goal importance, which leads to the increased money allocation to saving. Our results further suggest that a detailed financial plan may not always help consumers to pursue financial success. This research contributes to the body of work on budgeting and consumer finance. We conclude by discussing the theoretical and practical implications of our findings.
... People appear to be biased in their predictions of the future; predicting that projects will take less time than they actually will (see Roy et al., 2005a;Buehler et al., 2010;Halkjelsvik and Jørgensen, 2012, for review) and that they will be unlikely to experience future misfortunes (see Dunning et al., 2004, for review). These biases are frequently attributed to people being overly optimistic Taylor, 1998, 2002;Dunning et al., 2004). ...
... Apart from expectations about events, comparative optimism also characterizes behavioral expectations in that most people believe that they are more likely to perform morally desirable actions in the future than others are. The planning fallacy, implying that people underestimate the time they will need to complete projects (Buehler et al., 2010), may be view as an example of over-optimism and comparative optimism at the same time. People indeed underestimate the time they will need to complete projects but do not (or to a lesser extent) underestimate the time other people will need to complete their projects. ...
... Construal level theory (Trope & Liberman, 2003;Liberman & Trope, 2008) predicts that goals associated with high-level "why" construals are perceived to be more important than goals associated with low-level "how" construals. Goals construed at a high-level feel meaningful but are temporally distal, so students do not feel constrained in planning how they will actually attain them (Liberman & Trope, 1998), leading to both lack of preparation and overly optimistic estimates about the likelihood of distal goal attainment (the planning fallacy, Buehler, Griffin, & Peetz, 2010;Gilovich, Kerr, & Medvec, 1993;Kahneman & Tversky, 1979). ...
In order for students to do well in school, they must take action to achieve their academic and career goals. Students may have the strategies necessary to succeed but may not enact them when the time is right because there is no cue that they should act now rather than later, and once they do act, their interpretation of experienced difficulty may derail efforts rather than encourage persistence. In three sets of experiments, I look at ways to frame experiences of un/certainty so that students see now is the time to work toward their academic goals, and ways to frame experiences of difficulty so that it is seen as implying that school success is an important goal. The first set of three experiments tested the prediction that feeling unsure about the path to one???s goals can be motivating if accompanied by the feeling that one has the skills needed to make progress toward one???s goals. Sense of un/certainty about the self and path were separately manipulated in college students. Feeling uncertain about one???s abilities reduced the salience of academic and career future identities, but feeling certain about those abilities did not motivate action unless combined with a sense of uncertainty about the path as well. This combination increased planned study hours and actual goal-focused action, working on a resume builder instead of playing games. In the second set of three experiments, I provided children in school an interpretation of difficulty as signaling task importance; these students subsequently generated more school-focused future identities and strategies to attain them, and performed better on standardized intelligence and writing tasks. Children provided no interpretation of difficulty or an interpretation of difficulty as signaling impossibility of task success did not differ from each other in performance. The final two experiments provided students an interpretation of difficulty and assigned them to conditions implying they experienced difficulty as importance relatively more than others or that they experienced difficulty as impossibility relatively less than others. These students viewed investment in academics as more identity-congruent, planned to study more, and invested more time on a difficult task.
... For example, using scores on the short version of the Dundee Stress State Questionnaire (DSSQ; Matthews et al., 2002), which assesses subjective experience in task performance situations, Matthews et al. (2002) found higher distress, lower worry and some increase in task engagement was evident for tasks involving working memory (e.g., mental arithmetic), whereas for tasks involving vigilance (e.g., watching images), which are less mentally demanding, lower worry, lower task engagement, and some distress was evident. Such research has potentially important implications for the field of task duration prediction as support for the planning fallacy (Kahneman and Tversky, 1979) and temporal misestimation in general has been observed on a diverse range of tasks (see Buehler et al., 2010a, for a review), which are highly unlikely to be uniform in terms of the mental demands they place on the people performing them. Thus, examining the interplay between task type and individual differences in task engagement and stress state would provide a welcome addition to the task duration prediction literature. ...
Bias in predictions of task duration has been attributed to misremembering previous task duration and using previous task duration as a basis for predictions. This research sought to further examine how previous task information affects prediction bias by manipulating task similarity and assessing the role of previous task duration feedback. Task similarity was examined through participants performing two tasks 1 week apart that were the same or different. Duration feedback was provided to all participants (Experiment 1), its recall was manipulated (Experiment 2), and its provision was manipulated (Experiment 3). In all experiments, task similarity influenced bias on the second task, with predictions being less biased when the first task was the same task. However, duration feedback did not influence bias. The findings highlight the pivotal role of knowledge about previous tasks in task duration prediction and are discussed in relation to the theoretical accounts of task duration prediction bias.
... For example, one way in which organizations get themselves into trouble is by overestimating their future rate of production and therefore over-promising (Flyvbjerg, Bruzelius, & Rothengatter, 2003;Staats, Milkman, & Fox, 2012). Evidence seems to suggest that teams are rarely effective at eliminating this "planning fallacy" (Buehler & Griffin, 2015) and working in teams may even exacerbate overestimation (Buehler, Messervey, & Griffin, 2005). Accountability to peers and supervisors, which we described as one way to reduce overconfidence and extreme, unreasonable views, also can backfire. ...
This review considers the role of overconfidence in organizational life, focusing on ways in which individual-level overconfidence manifests in organizations. The research reviewed offers a pessimistic assessment of the efficacy of either debiasing tools or organizational correctives, and identifies some important ways in which organizational dynamics are likely to exacerbate overconfidence among individuals. The organizational consequences of overconfidence can be substantial, especially when it comes from those at the top of the organization. However, there are also reasons to suspect that the research literature exaggerates the prevalence of overconfidence.
... The planning fallacy is the tendency to underestimate how much time is needed to complete a future task despite the knowledge of how long such tasks have previously taken (Baron, 1998;Buehler et al., 2010). This comes from the fact that decision-makers focus on the more optimistic scenario for the task. ...
This thesis empirically explores the interaction between cognitive factors related to an entrepreneur’s confidence, financial decisions, and a firm’s performance. The objective of this study is to analyze the effects of some specific cognitive variables highly present in the entrepreneurial context and better understand how they shape a firm’s capital structure and entrepreneurial funding decisions. We first rely on a systematic literature review that investigates what are the main cognitive factors related to entrepreneurial confidence and how it affects a firm’s decisions and firm’s outcomes. Second, we address the relationship between ESE and fundraising and a firm’s performance in the second study of the thesis. A third study empirically addresses three cognitive factors related to an entrepreneur’s confidence in the decision to borrow bank credits. The manuscript brings originality and novelty by analyzing the effects of a specific class of cognitive variables related to an entrepreneur’s confidence.
... While several psychological mechanisms have been used to explain the planning fallacy (Buehler and Griffin, 2015), the main cognitive model is the inside and outside view proposed by Kahneman and Tversky (1979). The inside view focuses on singular information such as the details of the focal task, while the outside view focuses on distributional information such as how the current task fits into the set of related tasks (Buehler, Griffin and Peetz, 2010). In this model, the inside view is expected to lead to time underestimation whereas the outside view is expected to lead to more realistic, yet still imperfect, estimates (Kahneman and Lovallo, 1993). ...
One of the primary reasons for using agile software development (ASD) methods is to be agile – to deliver working software quickly. Unfortunately, this pressure often encourages ASD practitioners to make long-term trade-offs for short-term gains (i.e., to accumulate technical debt). Technical debt is a real and significant business challenge. Indeed, a recent study provides a conservative estimate of $361,000 of technical debt for every 100,000 lines of code. In this study, I examine the impact of the planning fallacy – people’s tendency to underestimate the time required to complete a project, even when they have considerable experience of past failures to live up to planned schedules – on the accumulation of technical debt in ASD projects. Using an experiment, I seek to establish a causal relationship between the planning fallacy and technical debt and to demonstrate that solutions to the planning fallacy can be leveraged to manage technical debt in ASD projects.
... Misestimation can often be attributed to strategic incentives, for example, gathering political support for the proposed project (Flyvbjerg 2008). However, a review of psychological studies by Buehler et al. (2010) as well as a comprehensive review of empirical duration estimation studies, laboratory and field experiments by Halkjelsvik and Jørgensen (2012) reveal a frequent tendency to underestimate the duration even if there are little or no incentives to manipulate the forecasts. From this perspective, the planning fallacy can be considered an instance of a general optimism bias (Lovallo and Kahneman 2003). ...
How to avoid project failures driven by overoptimistic schedules? Managers often attempt to mitigate the duration underestimation and improve the accuracy of project schedules by providing their planners with excessively detailed project specifications. While this traditional approach may be intuitive, solely providing more detailed information has proven to have a limited effect on eliminating behavioral biases. We experimentally test the effectiveness of providing detailed specification and compare it to an alternative intervention of providing historical information about the average duration of similar projects in the past. We find that both interventions mitigate the underestimation bias. However, since providing detailed project specification results in high variance of estimation errors due to sizable over‐ and underestimates, only the provision of historical information leads to more accurate project duration estimates. We also test whether it is more effective to anchor planners by providing historical information simultaneously with the project specification or to provide the historical information only after beliefs regarding the project duration are formed, in which case planners can regress their initial estimates toward the historical average. We find that the timing of disclosing information does not play a role as the estimation bias is mitigated and the accuracy is improved in both conditions. Finally, we observe that the subjective confidence in the accuracy of duration estimates does not vary across the interventions, suggesting that the confidence is neither a function of the amount nor the detail of available information.
... Furthermore, a thorough revision of previous plans, prior to proposing new ones can provide insight into the true timelines and budgets required for similar projects within the Galapagos or other relevant contexts. This exercise can be used as the "outside view" as referred to by Kahneman and Tversky to set benchmarks and avoid a planning fallacy due to optimism bias [76]. This benchmark can also aid in managing expectations of the financing institutions that generally define key performance indicators, the multiple stakeholders invested in water management and the expected beneficiaries. ...
Human activities contribute to the degradation of water quality on the Galapagos Islands, affecting human health and Galapagos’ fragile ecosystem. Despite the numerous resources vested in water management, programs have yet to achieve measurable improvements in water quality. To identify the governance mechanisms and barriers to improving water quality, we applied a two-pronged strategy: a collaborative, bottom-up compilation and prioritization of technical specialists and stakeholders’ concerns, and an evaluation of top-down government plans. The comparison of priorities and programs shows four major themes that require attention: barriers to better governance, community involvement, research, and policy. The islands lack a transparent method for accountability of the funds designated for water management, the efficacy of implementation, and results and progress beyond government periods. Government projects have included limited public participation, resulting in projects that do not meet stakeholder’s needs and concerns. Furthermore, the majority of the programs have not been completed within the timeline or budgets allocated. We recommend implementing a participatory governance mechanism that responds to each island’s context, balances socioecological and policy priorities and evaluates past projects to have adequate benchmarking, mitigating a planning fallacy. All programs should be accompanied by a transparent monitoring system that ensures accountability and evaluates water quality programs’ efficiency and effectiveness, according to goals and indicators developed collaboratively. This research may aid practitioners in small island developing states (SIDS) around the globe that are struggling with similar water management and governance issues and who may benefit from taking a bottom-up and top-down approach to assessing technical specialists’ and local stakeholders’ concerns in relation to past, present and future government programs.
... Psychological reasons refer to cognitive biases that can unintentionally lead people to make estimates that are over-optimistic. There are various psychological reasons for poor software estimates (see, for example, Buehler et al., 2010;Jørgensen & Moløkken-Østvold, 2004;Halkjelsvik & Jørgensen, 2012), amongst which the planning fallacy Kutsch et al., 2011) is the most well known. ...
Many Information Systems (IS) projects fail to be completed within budget and on schedule. A contributing factor is the so-called planning fallacy in which people tend to underestimate the resources required to complete a project. In this paper, we propose that signals of the planning fallacy can be detected in a project’s business case. We investigated whether language usage in business cases can serve as an early warning signal for overruns in IS projects. Drawing on two theoretical perspectives – the Linguistic Category Model (LCM) and Construal Level Theory (CLT) – two sets of rival hypotheses were tested concerning the relationship between project overruns and whether the language usage in a business case is abstract or concrete. A linguistic analysis of the business cases of large IS projects in the Netherlands suggests that concrete language usage in the business case is associated with bigger budget and schedule overruns. For researchers, our study contributes to the existing literature on the importance of language usage. For practitioners, our study provides an early warning indicator for overruns.
... For example, a well-known memory bias of predictive estimation is the planning fallacy, first introduced by Kahneman and Tversky (1979). This fallacy refers to the tendency for people to underestimate how long a project will take to complete, even though they know that past similar projects have taken longer to complete than planned (Buehler, Griffin, & Peetz, 2010). Rather than memory for prior similar tasks being ignored while generating predictions, previous task information might be instead misremembered (Roy et al., 2005). ...
... Este es la presencia, durante todo el proceso del censo o durante algunas etapas específicas, de un conjunto de decisiones incorrectas ocasionadas por sesgos cognitivos que implican un optimismo excesivo respecto a los tiempos necesarios para completar las diferentes etapas del censo, a los recursos financieros y humanos requeridos para finalizarlas y a la cobertura y confiabilidad de los datos a ser producidos. Estos problemas corresponden a la llamada falacia de la planificación (ver Buehler, Griffin y MacDonald, 1997;Buehler, Griffin y Peetz, 2010;Lovallo y Kahneman, 2003;Weick y Guinote, 2010). ...
La realización exitosa de un censo de población y vivienda no es simple ya que, debido al hecho de ser una acción de gran envergadura, enfrenta numerosas trabas y barreras, por lo cual pueden presentarse muchas posibilidades de errores. Es frecuente que la mayoría de estos no provengan de falta de capacidades técnicas, sino de decisiones erróneas resultantes de sesgos cognitivos que inducen a una confianza excesiva respecto a los tiempos necesarios para completar las diferentes etapas del censo, a los recursos financieros y humanos requeridos para finalizarlas y a la cobertura y confiabilidad de los datos a ser producidos. Estas decisiones equivocadas corresponden a la llamada falacia de la planificación. Existen diversos manuales y textos sobre la realización y administración de censos así como bastante experiencia acumulada. Sin embargo, los posibles errores que provienen de la mencionada falacia no han sido analizados. El objetivo de este trabajo es analizar cómo uno de los mecanismos de la falacia de la planificación es capaz de generar errores graves en los censos. Esto se ilustra con el caso de Chile, donde el censo de 2012 tuvo serios problemas. Se propone que muchos de los errores que afectaron este censo tienen su origen en sesgos cognitivos que intervinieron en procesos administrativos, metodológicos y técnicos.
... In support, reviews of studies in the time estimation literature indicate that most estimates of past task duration in general are inaccurate and easily biased (Wallace and Rabin, 1960;Fraisse, 1963;Ornstein, 1969;Poynter, 1989;Block and Zakay, 1997;Roy et al., 2005;Buehler et al., 2010;Halkjelsvik and Jørgensen, 2012). For example, task characteristics, such as whether the task is relatively short or long, can influence bias, with shorter tasks tending be overestimated and longer tasks tending to be underestimated (Bird, 1927;Yarmey, 2000;Lejeune and Wearden, 2009;Tobin and Grondin, 2009). ...
The present study sought to determine whether witness memory for duration could be improved. In three studies, we examined the effects of unpacking (breaking an event into its component parts), anchoring (supplying participants with a reference duration), and summation (summing component estimates). Participants watched a video-recorded mock crime and provided duration estimates for components of the crime (e.g., casing the car, unlocking the door, etc.) and for the total crime. Results indicate that bias in estimated duration was less for the sum of the parts than it was for the overall duration estimate. Further, the sum of the individual parts did not equal the total estimate, even though all estimates were given in sequence. Summing the component parts could be a more successful intervention than anchoring or unpacking and is easy to employ with witnesses.
... The time stress that employed adults experience at work also results from tight deadlines (17,18). Some deadlines are strict: once an original deadline has passed, taking any action related to the task is impossible or costly. ...
In nine studies using archival data, surveys, and experiments, we identify a factor that predicts gender differences in time stress and burnout. Across academic and professional settings, women are less likely to ask for more time when working under adjustable deadlines (studies 1 to 4a). Women's discomfort in asking for more time on adjustable deadlines uniquely predicts time stress and burnout, controlling for marital status, industry, tenure, and delegation preferences (study 1). Women are less likely to ask for more time to complete their tasks because they hold stronger beliefs that they will be penalized for these requests and worry more about burdening others (studies 1 to 2d). We find no evidence that women are judged more harshly than men (study 3). We also document a simple organizational intervention: formal processes for requesting deadline extensions reduce gender differences in asking for more time (studies 4a to 5).
Consumer researchers have often pondered the relevance of the research published in the field (Pham, 2013; Sheth, 1982). This concern is exemplified by the recent remarks of the editors of the Journal of Consumer Research: “We encourage the authors to ‘make it meaningful’ by being specific about the relevance of their work to particular audiences, including but not limited to fellow academics” (Dahl, Fischer, Johar, & Morwitz, 2014, p. iii). This chapter therefore begins with a simple but important question: Why should we care about consumer emotions? In other words, are consumer emotions relevant to our understanding of consumer psychology? Why Consumer Emotions Matter: Prevalence and Power The answer to the preceding question is a resounding “yes,” for two main reasons: prevalence and power. Emotions are ubiquitous in consumer-related contexts. Companies systematically try to induce emotional reactions in consumers through incidental (e.g., store ambience; Kaltcheva & Weitz, 2006) and integral (e.g., brands; Thomson, MacInnis, & Park, 2005) sources. Additionally, positive and negative emotions are present at every step of the consumer behavior cycle, from search (Teixeira, Wedel, & Pieters, 2012), to evaluation (Holbrook & Batra, 1987), to choice (Luce, Payne, & Bettman, 1999), to consumption (Chan, van Boven, Andrade, & Ariely, 2013), and finally, to disposal (Grasmick, Bursik, & Kinsey, 1991). Emotions are not only prevalent but also powerful. For instance, in comparing reason-based and feeling-based evaluations of advertising material, Pham, Cohen, Pracejus, and Hughes (2001) found that feeling-based evaluations produced faster and more consistent judgments and that they were better predictors of the number and valence of thoughts about the target. Feeling-based assessments have also been shown to override (a) the impact of magnitude (e.g., number of items) on evaluations (Hsee & Rottenstreich, 2004), (b) the impact of cognitive assessments on risky decisions (Loewenstein, Weber, Hsee, & Welch, 2001), and (c) the long-term benefits of a given option (Hoch & Loewenstein, 1991; Van den Bergh, Dewitte, & Warlop, 2008). A critic might argue that most studies on the role of emotions in consumer behavior have addressed relatively inconsequential decisions. If the consequences of the decisions increase, the impact of emotions may fade. This argument can be challenged on empirical and logical grounds. First, many daily consumer choices are of little consequence in the short term (e.g., how frequently do we buy a bottle of water vs. a house.
Warum werden bei vielen, vor allen Dingen großen Projekten, die ursprünglichen Planungen nicht eingehalten? Werden Investoren oder private Auftraggeber systematisch durch eine Projektmanagementmafia hereingelegt? Oder erliegen die Planer immer den gleichen selbstschädigenden und projektgefährdenden Denkfehlern?
People often underestimate their completion times of future tasks or events. The phenomenon of optimistic time prediction is called the planning fallacy. Prior research has demonstrated that individuals are less likely to make optimistic predictions about events that are temporally relatively close. Furthermore, events involving relatively more effort are perceived as temporally closer. Hence, we recruited 102 undergraduates and conducted an experiment to test whether a high-effort assignment would reduce perceived temporal distance to the deadline and, thereby, reduce the planning fallacy. The results showed that participants in the high-effort condition perceived the deadline as temporally closer, generated less optimistic time predictions and were less likely to commit the planning fallacy. The inverse relationship between the amount of required effort and the likelihood of committing the planning fallacy was mediated by perceived temporal distance to the deadline. Our findings provide an innovative approach for reducing the planning fallacy in students.
Interpersonal communication is an integral part of everyday life. People swap stories with their friends, share information with their neighbors, and gossip with their co-workers around the water cooler. Consumers recommend new movies, complain about bad products, and suggest vacation destinations they think others will enjoy.The person-to-person sharing of thoughts, opinions, information, news, and other content can be described as word of mouth. Broadly speaking, word of mouth is the informal communication between people about all sorts of goods, services, and ideas. It includes discussions of products (e.g., sneakers), brands (e.g., Nike), political candidates, ideas (e.g., environmental reform), and behaviors (e.g., smoking). It includes direct recommendations (e.g., “You should try this restaurant”) and mere mentions (e.g., “We went to this restaurant for lunch”).Word of mouth is not just frequent, it is also important. What others talk about and share has a big impact on consumer behavior. Research finds that social talk shapes everything from where people eat (Godes & Mayzlin, 2009) and what consumers read (Chevalier & Mayzlin, 2006) to the drugs doctors prescribe (Iyengar, Van den Bulte, & Valente, 2010). McKinsey and Company (Iyengar, Van den Bulte, & Valente, 2010) argues that “word of mouth is the primary factor behind 20 to 50 percent of all purchasing decisions.” While interpersonal communication has been around for thousands of years, the rise of social media has focused even more attention on this area. Rather than just talking to one person over coffee, consumers can now share their thoughts with thousands of others in a matter of seconds. People can tweet, post, like, and share all sorts of opinions and information whenever they feel so inclined. Technology has accelerated the pace of communication and made it faster and easier to share with a large number of people very quickly. The fact that social media conversations leave a written record has also encouraged companies to realize the importance and power of interpersonal communication, causing many organizations to make word of mouth a key part of marketing strategy.This chapter provides an overview of recent research on word of mouth and interpersonal communication. First, I provide a simple framework that is useful for organizing much of the research in the area. Then, after reviewing relevant work in each part of the framework, I sketch out some potential directions for future research.
People frequently underestimate the time needed to complete tasks and we examined a strategy – known as backward planning – that may counteract this optimistic bias. Backward planning involves starting a plan at the end goal and then working through required steps in reverse-chronological order, and is commonly advocated by practitioners as a tool for developing realistic plans and projections. We conducted four experiments to test effects on completion time predictions and related cognitive processes. Participants planned for a task in one of three directions (backward, forward, or unspecified) and predicted when it would be finished. As hypothesized, predicted completion times were longer (Studies 1–4) and thus less biased (Study 4) in the backward condition than in the forward and unspecified conditions. Process measures suggested that backward planning may increase attention to situational factors that delay progress (e.g., obstacles, interruptions, competing demands), elicit novel planning insights, and alter the conceptualization of time. © 2016. The authors license this article under the terms of the Creative Commons Attribution 3.0 License.
The current World facing a range of environmental, social, and economic challenges over the next decades. Nonetheless, as the problems are deeply intertwined, the only way for policymakers to save the global economy from falling into a dangerous downward spiral is to take concerted action, giving greater priority to revitalizing the recovery in output and employment in the short run in order to pave more solid ground for enacting the structural reforms required for sustainable and balanced growth over the medium and long run.
What it is so difficult to obtain in most of the countries, that politicians and public bodies they apply competences and manage his governments as projects, programmes and project portfolios too?. Political divides over how to tackle these problems are impeding needed, much stronger policy action, further eroding the already shattered confidence of business and consumers.
PPPmgnt is a substantial part of the corporate government. Corporate governance involves a set of relationships between a company’s management, its board, its shareholders and other stakeholders. Corporate governance also provides the structure through which the objectives of the company are set, and the means of attaining those objectives and monitoring performance are determined (OECD, 2004).
The governance of project management concerns those areas of corporate governance that are specifically related to project activities. Effective governance of project management ensures that an organization’s project portfolio is aligned to the organization’s objectives, is delivered efficiently and is sustainable. Governance of project management also supports the means by which the board and other major project stakeholders exchange timely, relevant and reliable information (APM, 2011).
Many products marketed in the United States and around the world can cause harm to consumers if misused. Of even greater concern, some products, such as combustible tobacco, can be inherently harmful to consumers even when used as intended (CDC, 2014a). Since the emergence of the modern-day Federal Trade Commission (FTC) and Food and Drug Administration (FDA) in the 1930s, the U.S. government has enacted legislation and regulations that help to protect consumers through information disclosures and/or warnings to identify potential risks. Laws and regulations involving consumer protection are directly related to the provision of objective and truthful information to consumers and how they, in turn, utilize this information. These laws are designed to prevent organizations from engaging in deceptive or unfair business practices and to help protect the rights of consumers. For example, in the United States, agencies such as the FDA, FTC, Consumer Product Safety Commission (CPSC), Federal Communications Commission (FCC), and others establish and enforce regulations that help to protect consumers. As part of this regulation, agencies often require marketers to provide disclosures or warnings on packaging or at the point of purchase, particularly for products in which safety or public health is an issue, such as for food, tobacco, and prescription drugs.Federal agencies make decisions regarding whether or not a warning or disclosure is appropriate and how such information should be presented to consumers. To make these decisions, agencies require a clear understanding of how consumers acquire, process, and use warning and/or disclosure information. Furthermore, federal agencies take into account consumers’ initial beliefs and knowledge regarding the product, potential individual differences among consumers, economic costs and benefits, and situational moderators.at any point in time, agencies may be deluged with hundreds of current or emerging questions that present opportunities for consumer research. However, due to time and resource constraints, existing regulations and court decisions, and filing requirements for new regulations (e.g., Office of Management and Budget; Federal Register posting), the federal agencies are only able to address a small fraction of these questions and issues that often have important implications for consumer health and well-being. This situation therefore creates both an important need and rich opportunity for consumer researchers. In this chapter, we first introduce conceptual frameworks for the study of warnings and disclosures. We also review recent research on critical topical domains.
Across cultures and throughout history, gift giving has played a fundamental role in human interaction. Gifting is deeply embedded in our cultural conception of social norms and values. Stories and acts of gift giving help us understand ourselves with regard to our cultural ideals (e.g., the Statue of Liberty given by France defined America's values around immigration), religious beliefs (e.g., the Three Magi gave gifts of gold, frankincense, and myrrh to Jesus), and our own aspirations (e.g., in the classic Wizard of Oz, the “Wizard's” gifts emphasized valued personal characteristics – a medal for courage for the Lion, a diploma for knowledge for the Scarecrow, and a heart for the Tin Man). Thus, the symbolic meaning and social value of a gift can far exceed its mere physical attributes and monetary worth.Gift exchange is an intrinsic element in maintaining cultural cohesiveness. It enables givers to define and strengthen their bonds with recipients via the choice of gifts that express their point of view on the relationship, the recipient, and the gift occasion. Much of the extant literature on gifting has studied the idiosyncratic set of practices and norms intended to preserve social bonds within a framework of ritualized occasions, such as birthdays or Christmas. Such research has examined how gifting provides relationship maintenance rites such as reciprocity and expressions of appreciation (Cheal, 1988) and reinforces established relationships (Bourdieu, 1977, 1986). Prior research further suggests that the rationale for gifting is that a prescribed cycle of reciprocal gift exchanges establishes predictable transactions between individuals (Sherry, 1983), thus ensuring that important relationships are regularly reaffirmed.Although gifting may largely be thought of as a strategically engineered process, givers and recipients alike are deeply invested in the process of gift exchange. Givers often experience strong feelings of anxiety and excitement in anticipation of presenting a gift to the recipient (Wooten, 2000). Furthermore, one's response to the gift selected is as important as the gift itself, and recipients often regulate their responses to the gift in order to preserve close relational ties. Given the importance of appropriately responding to a gift, society strictly regulates the process of giving and receiving.
Expectations are beliefs about something that will occur or that will be revealed in the future. They may be based on personal experience, information transmitted by others, cognitive construction or heuristic thinking. Expectations play a role in learning, motivation, decision making, affective responding and forecasting, and social interactions. Even though they show a variety of biases expectations often incorrectly appear to be accurate. One reason for the overestimation of the validity of expectations is that they affect the identification and evaluation of behaviors and events, as well as causal reasoning, memory, and interpersonal communication. Moreover, expectations may affect behaviors in such a manner that they make themselves come true or, less frequently, falsify themselves.
Im vorangegangenen Kapitel haben wir uns mit Entscheidungen und Zukunft beschäftigt. Der Brückenschlag gelingt durch die Prognose, sie ist der Schlüssel zu „guten“ Entscheidungen. Aber wie funktioniert sie, vor allem im Falle von Alltagsentscheidungen, wenn der Aufwand einer komplexen Vorhersagemethodik nicht lohnt? Worauf ist zu achten, um die eigene Zukunft, soweit es eben geht, abzusichern oder zumindest zu verstehen, wie groß die Unsicherheit ist? Welche Fehler können dabei gemacht werden?
This chapter discusses various types of optimism biases and the causes of those biases. It suggests that the field sorely needs more consistency in its use of terms related to optimism biases. The chapter discusses definitions for relevant terms and identify key features of various forms of bias. It also provides a framework for understanding relations among those terms and effects. Then, the chapter talks about optimism in studies involving self-other comparisons, isolating a subset of optimism biases (unrealistic-optimism, better-than-average, and shared-circumstance effects). Finally, the chapter elucidates classic and recent findings from another subset of studies, namely those on the desirability bias. This is the subset of studies that are designed for, and relevant to, testing the question of whether outcome desirability has a biasing influence on expectations about that outcome. The chapter also mentions four types of accounts for self-other overoptimism.
Consumers face a wide variety of stressors every day. Some stressors come from “daily hassles” (Lazarus & Folkman, 1984, p.13), such as making difficult purchase decisions or experiencing poor service, and others originate from chronic illness, such as obesity or breast cancer, that requires consumers to make health and consumption decisions. Consumers cope with these stressors in multiple ways to alleviate stress and enhance mental and physical well-being. For example, when consumers are exposed to health messages that warn of the risk of heart disease due to obesity, some consumers “cope” with this stressful situation by making a plan to cut their daily food intake, while others cope by stopping themselves from being upset by distracting themselves from unpleasant thoughts due to the threatening health message. Given the seeming prevalence of coping episodes in consumers’ everyday life, consumer researchers have recently begun to explore how consumers cope with stress stemming from a variety of distinct consumer-oriented stressors, such as long waiting times in negative service environments (Miller, Kahn, & Luce, 2008); purchasing, using, and disposing of products and services (Sujan, Sujan, Bettman, & Verhallen, 1999); adoption of new technology products (Cui, Bao, & Chan, 2009; Mick & Fournier, 1998); difficult decision making (Luce, Payne, & Bettman, 1999); or threatening health messages regarding the risk of disease (Lin, Lin, & Raghubir, 2003). Despite these recent developments in the consumer literature, the prospects for future research to build off these contributions loom larger than ever. The goal of the present chapter is to profile the existing coping research and to summarize the key findings and gaps in the literature. The chapter concludes with a discussion of fruitful future research questions for progress within the coping area.In the present chapter, we organize our analysis around three objectives. First, we familiarize people with the general construct of coping and the antecedents and consequences of coping in the historical context of the literature. This section provides any researchers new to the study of coping, or its effects, a core foundation from which to build. Second, we provide a review of recent coping research most directly related to consumer behavior over the last ten years. Our emphasis on the last ten years is not only in the spirit of this handbook, but is a reflection of coping's recent emergence in the study of consumer psychology and consumer behavior
Electronic auctions create a complex decision environment, in which bidders have to submit their bids based on very limited information that they receive as feedback from the auction platform. We argue that the amount of such feedback information, the form in which it is presented, and the context in which this transfer takes place all might influence the way the information is processed, and the decisions that result from receiving this information. The impact of these variables also depends on individual characteristics of the bidders such as their cognitive style. We present an empirical study based on two experiments in which we analyze the impact of these variables on decision outcomes. Results indicate that providing more feedback information can indeed lead to more aggressive (and less rational) bidding behavior and that the framing of information (e.g. whether subjects are told that they ‘won’ or ‘lost’ an auction, or they receive bid data) also strongly influences behavior. There are also significant interactions with individual characteristics, so we conclude that it is necessary to tailor auction platforms specifically to the characteristics of individual bidders.
What Is Online Social Interaction We often interact with others in our social environment. These interactions have traditionally taken place in a face-to-face context, such as when we interact with loved ones at home, friends at a party, salespeople in a store, or colleagues at work. However, more recently, we have also begun to interact with others in an online setting. For example, we may read product reviews posted by others on review websites, post our status updates on social media websites, follow and comment on blog posts, provide online feedback to firms on corporate websites, join online brand communities, give advice to other consumers on product support websites, and interact with potential partners on dating websites. We formally define online social interaction as Internet-enabled communication and exchange activities involving both consumers and firms (Yadav & Pavlou, 2014). Here, consumers refer to people who purchase products and services for their own use, while firms refer to for-profit or not-for-profit organizations in the marketplace. Online social interactions are likely to occur even more frequently in the future since many consumers are now online more than ever, thanks to smartphones, tablets, laptops, and the availability of Wi-Fi networks at home and work and in public spaces. Given the ubiquity and importance of online social interactions in our daily lives, the broad purpose of this chapter is to synthesize what is known and unknown about the effects of online social interaction on consumer judgment and decision making. Specifically, this chapter is organized into the following three sections: (i) characteristics of online social interactions, (ii) past research on online social interactions, and (iii) future research on online social interactions. These sections have been developed to provide the reader with short, top-line summaries of key research findings, and also to identify promising directions for future research in this emerging topic area.Characteristics of Online Social Interaction As discussed earlier, consumers can interact with one another in the online or offline worlds. Thus, the first question we address in this section is, how does online social interaction differ from offline social interaction Subsequently, we delve deeper into the characteristics of online social interactions by outlining the key motivations that drive consumers to interact with others on the Internet.
The construct of power is part of the structural foundation of social psychology. Two of social psychology's most seminal works – Milgram's experiments on obedience to authority (Milgram, 1963) and Zimbardo's prison experiment (Zimbardo, 1973, 1974) – involved differences in power. In more recent years, the contemporary landscape of social psychology continues to feature power prominently. In one recent report, the number of power-related publications appearing in top social psychology journals has approximately doubled in the last five years compared to the previous five years (Galinsky, Rucker, & Magee, 2015).Although work on power has spanned more than fifty years in social psychology, researchers have been largely silent in considering power's role in consumer behavior. As one relevant indicator, only in the last five years have papers on power begun to appear regularly in journals focused more on consumer behavior and consumption contexts such as the Journal of Consumer Research (e.g., Dubois, Rucker, & Galinsky, 2012; Jiang, Zhan, & Rucker, 2014; Jin, He, Zhang, 2014; Kim & McGill, 2011; Rucker & Galinsky, 2008; Rucker, Dubois, & Galinsky, 2011). The recent embrace of power by consumer researchers provides a foothold for the construct but also creates an important pivot point for the field. With power accepted as a topic important to consumer behavior, we explore what must be done to move the research agenda on power forward.In the present chapter, we organize our analysis around three objectives. First, we familiarize readers with the general construct of power and the experimental approach used to study power. This section provides any researchers new to the study of power, or its effects on human behavior, a core foundation upon which to build. Second, we provide a review of power research most directly related to consumer behavior over the last five years. Our emphasis on the last five years is both in the spirit of this handbook and a reflection of power's recent emergence in the study of consumer psychology and consumer behavior. Finally, we emphasize important and unanswered questions for power in the study of consumer behavior. In doing so, we hope to utilize this pivot point to foster the next generation of power-related research in consumer behavior for seasoned and new researchers alike. As a whole, this chapter provides a nomological net or roadmap for the study of power built around antecedents, psychological processes, consequences, and future directions.
Defense acquisition programs, which had their initial inception in the 1970s, performed exceptionally well by many measures. The management of acquisitions during this period is examined in detail by means of case studies, and contrasted with earlier and later periods, to identify key factors and formulate promising policy initiatives. Previous findings about the crucial importance of decisions in the very earliest conceptual phase are strongly confirmed and success is shown to have very often hinged on effective intervention by the Director of Defense Research and Engineering (DDR&E) even before the equivalent of today's Materiel Development Decision. Factors in DDR&E's successes included a focus on the intersection of technology and military need, DDR&E's background of institutional success and the prestige and credibility it established, a compact and highly capable staff, a strong culture of objectivity and absence of either pessimistic or optimistic bias, excellent internal and external communications, a very sharp focus on things that made a real difference, and close meshing with the top management of the Department of Defense and its priorities. Finally, ways that these lessons could be effectively applied in today's environment are explored.
Healthcare is often thought of as a negative service; no one wants to get hurt or be sick, and it is unpleasant to contemplate and prepare for the reality that this can happen. Adding to that burden is the degree of uncertainty surrounding whether and when shocks, either chronic or acute, to health will occur. Consumer decisions affecting health can range from routine choices about whether to have salad for lunch, get a flu shot, or select a primary care doctor, to more serious and consequential choices about what is the right insurance to have, when to seek medical care, and what the best treatment is for a serious illness such as cancer. Consumers have greatly benefited from recent advances in medical knowledge about the causes of disease and how to prevent or treat it. Technology now gives consumers the ability to manage uncertainty and negative health outcomes with unprecedented access to excellent sources of information, advice, and feedback. At the same time, the responsibility of making wise healthcare decisions has increasingly shifted to individuals, making them more accountable than ever for their personal choices and spending. So while today's consumer is better informed and more autonomous than those in previous generations, making good health and healthcare choices can still be rife with complexity and difficult trade-offs. Given the theoretical and practical implications for both consumer welfare and public policy, understanding how people navigate the medical marketplace is an important focus for psychologists. To that end, this chapter outlines our understanding of factors that shape consumer health decisions. We begin with individual awareness and perception of health risks, which serve as the foundation for almost any model of health behavior. Next, we explore how risk perceptions lead people to approach the trade-offs they believe are necessary to manage the risks of poor health outcomes. The final section explores how the cognitive factors underlying health decisions combine with significant social, emotional, and environmental forces to guide prevention behaviors, and ultimately health outcomes. Throughout, domains in which consumer research has already made a contribution are noted, along with important areas that warrant future research. Understanding Health Risk A dominant approach to studying health has been to examine risk perceptions, because they are the primary drivers of behavioral change (Brewer et al., 2007). In health, risk is typically defined as a likelihood that an unfavorable event involving injury or loss will occur. In order for people to make a conscious decision to be healthier, they must know and believe they are at some risk of experiencing a negative event. Theoretical models of health risk perception continue to provide fertile ground for researchers in all domains of health, including psychology, public policy, medicine, and consumer behavior. Early models such as the Health Belief Model (Becker, 1974) provided a view that increased risk perceptions facilitated behaviors that either promote good health or prevent bad health. Unfortunately, it is not this simple; a great deal of subsequent research showed that people do not always behave more healthfully when well informed of the risks (Ajzen, 1985, 1991). Cigarette smoking may be one of the best examples illustrating this point. The causal relationship between cigarette smoking and poor health outcomes is definitive, and the warnings are impossible to ignore. Despite broad consumer knowledge of the potential harms, cigarette smoking remains the leading cause of preventable death in the United States, where almost one in five of all American adults smoke (CDC, 2014a).
Many information systems (IS) projects encounter significant problems. The literature suggests that decision-makers can be misled by overoptimistic estimates. We argue that such overoptimism may also be present in the choice of language in business cases. In this study, we analyzed the usage of such framing in 20 business cases for large IS projects of the Dutch government. Our findings show that newly proposed systems are systematically framed using positive adjectives, whereas the existing systems are framed using negative adjectives. This pattern of framing may subconsciously bias the decision-makers toward investing in new IS projects.
Optimism is essential when initiating transformation programs. Without it, they lack vision and momentum. Yet when left unchecked, optimism bias leads to divergence of ambition and reality. Transformation programs are doomed to disappoint the stakeholders and operators. Calibrating optimism and realism is critical. Stakeholders must first understand and recognize optimism bias in themselves and the system they are seeing to change. Failure to do so is failure to learn and evolve, leading to stagnation and transformation failure. As all transformation has a fundamental element of culture/behavior change, developing a people and leadership strategy that underpins the transformation is essential. The author will offer a practical toolkit for developing the strategy and ensuring successful implementation. This chapter will examine the causes and impact of optimism bias in megaprojects context and establish the application of the theory in the transformation program context. It will then set out a toolkit for strategic change that draws upon behavioral insights to de-risk the operational phase. Thus enabling senior stakeholders and operators to ensure the transformation drifts toward a mutually satisfactory conclusion.
Introduction Open any introductory marketing textbook and you will learn that the role of the firm is to create, communicate, and deliver value to the consumer who, in turn, takes the passive role of paying and consuming. For many years, this was, in fact, how marketers, consumer researchers, and psychologists perceived these two roles; the notion of consumer input into value creation was almost entirely neglected.This began to change when researchers in the area of innovation identified product users modifying and innovating on their own. In fact, von Hippel, De Jong, and Flowers (2012) found that in a representative sample of UK consumers, more than 6 percent had engaged in product modification or innovation during the prior three years, resulting in annual product development expenditures 1.4 times larger than the respective research and development (R&D) expenditures of all UK firms. More broadly, what emerged was the concept of “democratizing innovation,” that getting users actively involved in the process of new product development (NPD) can be a great source of value to the consumer and, thus, the firm (von Hippel, 2005). Today, consumer input is a recognized force in new product development, so much so that the Marketing Science Institute (MSI) listed it as one of its top priorities for exploration for 2008 through 2010.A parallel development in the marketplace has been that firms are going after smaller and more well-defined segments (Dalgic & Leeuw, 1994; Kotler & Armstrong, 2013). This is due to a number of factors, including the abundance of brands competing in many sectors; the rapid growth in media outlets, particularly online; and the increasing amount of information available on individual consumers. The result is that, in both media (Nelson-Field & Riebe, 2011) and products (Dalgic, 2006), the use of niche marketing is on the rise, while mass marketing is becoming an increasingly less viable option, particularly for new products.These two developments, consumer involvement in design as well as smaller target markets, have resulted in the practice of self-customization, where instead of offering ready-made products, the firm equips consumers with the tools to customize and design their own product. This can be viewed as the ultimate form of niche marketing, where the resulting segments consist of individuals.
What has consumer research taught us about how to make our lives better? By “better,” we mean according to us consumers, in terms of how happy we feel in our lives and with the choices we make: our subjective sense of well-being. Having surveyed the research, it is our pleasure to report that over the past ten years, consumer research has taught us quite a lot in terms of things we can do, choices we can make, and ways that we can think to increase our happiness. Still, for as much as we have learned, there is even more yet to learn, which makes consumer happiness a ripe topic for future research.We can attribute much of the impetus for consumer happiness research to two sources: Martin Seligman's American Psychological Association Presidential Address in 1998 and David Mick's Association of Consumer Research Presidential Address in 2005. Both of these speeches implored their respective fields, Seligman's psychology and Mick's consumer research, to shift the research agenda toward improving subjective well-being. In Seligman's 1998 address, he redefined the mission of psychology to “making the lives of all people better,” and in doing so carved out the subfield known as Positive Psychology: “a science and profession whose aim is the building of what makes life most worth living.” In Mick's 2005 address, he suggested that the field should pursue “investigations that are framed by a fundamental problem or opportunity, and that strive to respect, uphold, and improve life in relation to the myriad conditions, demands, potentialities, and effects of consumption,” terming this pursuit “transformative consumer research.” This chapter reviews research over the past decade that heeded these urgings and sought to transform consumers’ lives by increasing their happiness and well-being. This research has typically taken one of two approaches: investigating the happiness consumers feel in their lives at a broad level, or investigating the happiness consumers feel with respect to more specific consumption episodes. The chapter is organized as such. To begin our review, since consumption typically relies on the expenditure of either or both of our two fundamental resources – money and time – we first discuss research (including some of our own) that relates these resources to happiness in general.
"Over budget, over time, over and over again" appears to be an appropriate slogan for large, complex infrastructure projects. This article explains why cost, benefits, and time forecasts for such projects are systematically over-optimistic in the planning phase. The underlying reasons for forecasting errors are grouped into three categories: delusions or honest mistakes; deceptions or strategic manipulation of information or processes; or bad luck. Delusion and deception have each been addressed in the management literature before, but here they are jointly considered for the first time. They are specifically applied to infrastructure problems in a manner that allows both academics and practitioners to understand and implement the suggested corrective procedures. The article provides a framework for analyzing the relative explanatory power of delusion and deception. It also suggests a simplified framework for analyzing the complex principal-agent relationships that are involved in the approval and construction of large infrastructure projects, which can be used to improve forecasts. Finally, the article illustrates reference class forecasting, an outside view de-biasing technique that has proven successful in overcoming both delusion and deception in private and public investment decisions.
Results from the first statistically significant study of the causes of cost escalation in transport infrastructure projects are presented. The study is based on a sample of 258 rail, bridge, tunnel and road projects worth US$90 billion. The focus is on the dependence of cost escalation on (1) length of project implementation phase, (2) size of project and (3) type of project ownership. First, it is found with very high statistical significance that cost escalation is strongly dependent on length of implementation phase. The policy implications are clear: Decision makers and planners should be highly concerned about delays and long implementation phases because they translate into risks of substantial cost escalations. Second, it is found that projects have grown larger over time and that for bridges and tunnels larger projects have larger percentage cost escalations. Finally, by comparing cost escalation for three types of project ownership--private, state-owned enterprise and other public ownership--it is shown that the oft-seen claim that public ownership is problematic and private ownership effective in curbing cost escalation is an oversimplification. The type of accountability appears to matter more to cost escalation than type of ownership.
The authors summarize 35 years of empirical research on goal-setting theory. They describe the core findings of the theory, the mechanisms by which goals operate, moderators of goal effects, the relation of goals and satisfaction, and the role of goals as mediators of incentives. The external validity and practical significance of goal-setting theory are explained, and new directions in goal-setting research are discussed. The relationships of goal setting to other theories are described as are the theory’s limitations.
Confidence has been found to vary with temporal proximity to an upcoming task: People's confidence that they will do well tends to diminish as the "moment of truth" draws near. We propose that this phenomenon stems in part from individuals using their pretask arousal as a cue to their level of confidence. Arousal that is part and parcel of "gearing up" to perform a task may be misattributed to diminished confidence. Consistent with this reasoning, participants in two experiments who were encouraged to misattribute their arousal to a neutral source ("subliminal noise") expressed greater confidence in their ability than did participants not able to do so-a result that would not be obtained if arousal was simply a reflection, and not a cause, of diminished confidence.
A selective review of research highlights the emerging view of groups as information processors. In this review, the authors include research on processing objectives, attention, encoding, storage, retrieval, processing response, feedback, and learning in small interacting task groups. The groups as information processors perspective underscores several characteristic dimensions of variability in group performance of cognitive tasks, namely, commonality—uniqueness of information, convergence–diversity of ideas, accentuation–attenuation of cognitive processes, and belongingness–distinctiveness of members. A combination of contributions framework provides an additional conceptualization of information processing in groups. The authors also address implications, caveats, and questions for future research and theory regarding groups as information processors.
The authors investigated compensatory self-enhancement in Japanese and Canadian university students. Research has revealed that when North Americans publicly discover a weakness in one self domain, they typically bolster their self-assessments in another unrelated domain. This effect is less commonly found in private settings. Following a private failure experience on a creativity task, Canadians discounted the negative feedback, although they did not exhibit a compensatory self-enhancing response. In contrast, Japanese were highly responsive to the failure feedback and showed evidence of reverse compensatory self-enhancement. This study provides further evidence that self-evaluation maintenance strategies are elusive among Japanese samples.
Megaprojects and Risk provides the first detailed examination of the phenomenon of megaprojects. It is a fascinating account of how the promoters of multi-billion dollar megaprojects systematically and self-servingly misinform parliaments, the public and the media in order to get projects approved and built. It shows, in unusual depth, how the formula for approval is an unhealthy cocktail of underestimated costs, overestimated revenues, undervalued environmental impacts and overvalued economic development effects. This results in projects that are extremely risky, but where the risk is concealed from MPs, taxpayers and investors. The authors not only explore the problems but also suggest practical solutions drawing on theory, experience and hard, scientific evidence from the several hundred projects in twenty nations and five continents that illustrate the book. Accessibly written, it will be the standard reference for students, scholars, planners, economists, auditors, politicians and interested citizens for many years to come.
"Over budget, over time, over and over again" appears to be an appropriate slogan for large, complex infrastructure projects. This article explains why cost, benefits, and time forecasts for such projects are systematically over-optimistic in the planning phase. The underlying reasons for forecasting errors are grouped into three categories: delusions or honest mistakes; deceptions or strategic manipulation of information or processes; or bad luck. Delusion and deception have each been addressed in the management literature before, but here they are jointly considered for the first time. They are specifically applied to infrastructure problems in a manner that allows both academics and practitioners to understand and implement the suggested corrective procedures. The article provides a framework for analyzing the relative explanatory power of delusion and deception. It also suggests a simplified framework for analyzing the complex principal-agent relationships that are involved in the approval and construction of large infrastructure projects, which can be used to improve forecasts. Finally, the article illustrates reference class forecasting, an outside view de-biasing technique that has proven successful in overcoming both delusion and deception in private and public investment decisions.
The American Planning Association recently endorsed a new forecasting method called reference class forecasting, which is based on theories of planning and decision-making that won the 2002 Nobel prize in economics. This paper details the method and describes the first instance of reference class forecasting in planning practice. First, the paper documents that inaccurate projections of costs, demand, and other impacts of plans are a major problem in planning. Second, the paper explains inaccuracy in terms of optimism bias and strategic misrepresentation. Third, the theoretical basis is presented for reference class forecasting, which achieves accuracy in projections by basing them on actual performance in a reference class of comparable actions and thereby bypassing both optimism bias and strategic misrepresentation. Fourth, the paper presents the first case of practical reference class forecasting, which concerns cost projections for planning of large transportation infrastructure investments in the UK, including the Edinburgh Tram and London’s £15 billion Crossrail project. Finally, potentials for and barriers to reference class forecasting are assessed.
We review our research on predictions in two different domains: (a) people's estimates of how long they will take to complete various academic and everyday tasks and (b) forecasts by individuals in dating relationships of the future course of their romantic association. Our research indicates that people underestimate their completion times. Further, people appear to base their estimates on plan-based, future scenarios and they use attributional mechanisms to deny the relevance of their past failures to complete tasks on time. The optimistic bias disappears when observers forecast the completion times of other individuals (actors). Observers' estimates are no more accurate, however; instead observers exhibit a pessimistic bias, overestimating actors' task completion times. Compared to actors, observers make greater use of relevant previous experiences in generating their predictions; also while proposing future scenarios, observers are more likely to mention circumstances that might impede the actor's progress on the task. Our findings in the domain of love were generally consistent with those in the domain of work.
Conducted 3 experiments which demonstrated that group-induced shifts in choice are the result of informational influence processes, specifically, persuasive argumentation. These processes were hypothesized to be similar to those described in group-problem-solving research. In Exp I (n = 60 male undergraduates), the relative frequency and the persuasiveness of pro-risk to pro-caution arguments that Ss possessed prior to discussion correlated with (a) their initial choice of risk level and (b) the overall initial mean choice on the dilemmas. In Exp II (n = 196 male undergraduates), it was hypothesized that while a member's initial choice was determined by the balance of pro-risk and pro-caution arguments, shifts in choice following discussion would occur only when most of the persuasive arguments were partially shared (i.e., known to only a few members). This was tested by applying a partially shared information model that predicts shifts in choice after discussion. Results support the hypothesis. Exp III (n = 41 male undergraduates) produced additional support for the informational influence hypothesis; Ss received arguments produced by others before discussion, and merely reading these arguments produced substantial shifts in choice. (38 ref) (PsycINFO Database Record (c) 2012 APA, all rights reserved)
Fault trees represent problem situations by organizing "things that could go wrong" into functional categories. Such trees are essential devices for analyzing and evaluating the fallibility of complex systems. They follow many different formats, sometimes by design, other times inadvertently. The present study examined the effects of varying 3 aspects of fault tree structure on the evaluation of a fault tree for the event "a car fails to start." The fault trees studied had 4 to 8 branches, including "battery charge insufficient," "fuel system defective," and "all other problems." Six experiments were conducted, 5 of which used a total of 628 college community members and 1 of which used 29 experienced auto mechanics. Results show the following: (a) Ss were quite insensitive to what had been left out of a fault tree. (b) Increasing the amount of detail for the tree as a whole or just for some of its branches produced small effects on perceptions. (c) The perceived importance of a particular branch was increased by presenting it in pieces (i.e., as 2 separate component branches). Insensitivity to omissions was found with both college Ss and mechanics. It is suggested that, aside from their relevance for the study of problem solving, results have implications for (a) how best to inform the public about technological risks and to involve it in policy decisions and (b) how experts should perform fault tree analyses of the risks from technological systems. (PsycINFO Database Record (c) 2012 APA, all rights reserved)
When people encounter problems in translating their goals into action (e.g., failing to get started, becoming distracted, or falling into bad habits), they may strategically call on automatic processes in an attempt to secure goal attainment. This can be achieved by plans in the form of implementation intentions that link anticipated critical situations to goal-directed responses ("Whenever situation
x arises, I will initiate the goal-directed response
y!"). Implementation intentions delegate the control of goal-directed responses to anticipated situational cues, which (when actually encountered) elicit these responses automatically. A program of research demonstrates that implementation intentions further the attainment of goals, and it reveals the underlying processes. (PsycINFO Database Record (c) 2012 APA, all rights reserved)
Tested 3 hypotheses concerning people's predictions of task completion times: (1) people underestimate their own but not others' completion times, (2) people focus on plan-based scenarios rather than on relevant past experiences while generating their predictions, and (3) people's attributions diminish the relevance of past experiences. Five studies were conducted with a total of 465 undergraduates. Results support each hypothesis. Ss' predictions of their completion times were too optimistic for a variety of academic and nonacademic tasks. Think-aloud procedures revealed that Ss focused primarily on future scenarios when predicting their completion times. The optimistic bias was eliminated for Ss instructed to connect relevant past experiences with their predictions. Ss attributed their past prediction failures to external, transient, and specific factors. Observer Ss overestimated others' completion times and made greater use of relevant past experiences. (PsycINFO Database Record (c) 2012 APA, all rights reserved)
Principles of Forecasting: A Handbook for Researchers and Practitioners summarizes knowledge from experts and from empirical studies. It provides guidelines that can be applied in fields such as economics, sociology, and psychology. It applies to problems such as those in finance (How much is this company worth?), marketing (Will a new product be successful?), personnel (How can we identify the best job candidates?), and production (What level of inventories should be kept?).
The book is edited by Professor J. Scott Armstrong of the Wharton School, University of Pennsylvania. Contributions were written by 40 leading experts in forecasting, and the 30 chapters cover all types of forecasting methods. There are judgmental methods such as Delphi, role-playing, and intentions studies. Quantitative methods include econometric methods, expert systems, and extrapolation. Some methods, such as conjoint analysis, analogies, and rule-based forecasting, integrate quantitative and judgmental procedures. In each area, the authors identify what is known in the form of `if-then principles', and they summarize evidence on these principles.
The project, developed over a four-year period, represents the first book to summarize all that is known about forecasting and to present it so that it can be used by researchers and practitioners. To ensure that the principles are correct, the authors reviewed one another's papers. In addition, external reviews were provided by more than 120 experts, some of whom reviewed many of the papers. The book includes the first comprehensive forecasting dictionary.
Presents an integrative theoretical framework to explain and to predict psychological changes achieved by different modes of treatment. This theory states that psychological procedures, whatever their form, alter the level and strength of self-efficacy. It is hypothesized that expectations of personal efficacy determine whether coping behavior will be initiated, how much effort will be expended, and how long it will be sustained in the face of obstacles and aversive experiences. Persistence in activities that are subjectively threatening but in fact relatively safe produces, through experiences of mastery, further enhancement of self-efficacy and corresponding reductions in defensive behavior. In the proposed model, expectations of personal efficacy are derived from 4 principal sources of information: performance accomplishments, vicarious experience, verbal persuasion, and physiological states. Factors influencing the cognitive processing of efficacy information arise from enactive, vicarious, exhortative, and emotive sources. The differential power of diverse therapeutic procedures is analyzed in terms of the postulated cognitive mechanism of operation. Findings are reported from microanalyses of enactive, vicarious, and emotive modes of treatment that support the hypothesized relationship between perceived self-efficacy and behavioral changes. (21/2 p ref)
This study tested the hypothesis that group discussion moderates the tendency of attributors to underuse consensus information. In Study 1, high- or low-consensus information was associated with a description of a target person's behavior for 259 male and female Ss. Before rendering attributions, Ss spent 7 min either engaging in a group discussion, thinking about their judgment, or perusing attribution responses made by other Ss. Only the participants in the group-discussion conditions were affected by the consensus information. Three additional studies used procedures similar to those used by A. Vinokur and E. Burnstein (see record 1974-25207-001) to test a persuasive-arguments explanation of this group-discussion effect. The findings of these studies supported this view.
82 female undergraduates were assigned to 1 of 4 experimental groups--predict-request, information-request, predict only, and request only--in which requested tasks involved writing a counterattitudinal essay or singing over the telephone. In 3 experiments, Ss overpredicted the degree to which their behavior would be socially desirable and these errors of prediction proved to be self-erasing. Having mispredicted a given behavior, Ss were likely to have these predictions confirmed in later behavior, indicating that prediction of a behavioral sequence evokes a specific cognitive representation of that sequence which is subsequently accessed. Results demonstrate the strong effects on behavior of engaging in prebehavioral cognitive work. (27 ref) (PsycINFO Database Record (c) 2006 APA, all rights reserved).
A ubiquitous finding in research on human judgment is that people are overconfident about their true predictive abilities. The goal of this study was to understand why overconfidence arises and how it can be reduced to improve the accuracy of predictions about future personal events. Subjects made predictions about the results of their job search efforts 9 months away (e.g., starting salary); all of the events involved positive outcomes, where unrealistic optimism was expected. These events were constructed to vary in their underlying base rate of occurrence. Some subjects generated pro and/or con reasons concerning event occurrence before making their predictions. At low- to moderate-base rates, predictive accuracy increased when subjects generated a con reason. However, at high-base rates (events that occurred for a majority of the subjects), con reason generation had no effect on accuracy-all subjects were more accurate in predicting these events. Generation of pro reasons had no effect on accuracy, suggesting that subjects may have automatically generated supportive reasons as a by-product of the question-answering process. A substantive analysis of the reasons indicated that subjects attributed pro reasons to internal factors and con reasons to external factors. Moreover, subjects who generated internal pro reasons were less accurate than subjects generating external pro or either type of con reason.
Review of J. Scott Armstrong's 1978 book
In five studies, university students predicted their affective reactions to a wide variety of positive and negative future events. In Studies 1 to 3, participants also reported the affective reactions they experienced when the target event occurred. As hypothesized, they tended to anticipate more intense reactions than they actually experienced. In Studies 3 to 5, a cognitive determinant of this “intensity bias” was examined. It was hypothesized that people anticipate stronger affective reactions when they focus narrowly on an upcoming event in a manner that neglects past experience and less intense reactions when they consider a set of relevant previous experiences. Evidence from thought-listing measures as well as an experimental manipulation of temporal focus supported this hypothesis.
Although a robust finding in cross-cultural research is that Japanese exhibit less self-enhancement than North Americans, all of these studies have employed questionnaire measures susceptible to self-presentational biases. The present study assessed self-enhancement in a laboratory that covertly measured participants’ behaviors. Whereas Canadians were reluctant to conclude that they had performed worse than their average classmate, Japanese were hesitant to conclude that they had performed better. This research provides evidence that cultural differences in self-enhancement and self-criticism go beyond mere self-presentation.
This chapter explores the issue of evaluative consistency and context-dependence by considering when stability or flexibility in evaluative responding would be most useful for the social organism. We propose that cues about distance functionally shape evaluations to flexibly incorporate information from their current context when individuals are acting on proximal stimuli, but to transcend these immediate details when acting on distal stimuli. In this chapter, we review research within and beyond the attitude domain that has helped to shed light on issues of evaluative consistency, and then build on this research to describe the proposed link between distance and evaluative consistency in more detail. We suggest that construal level provides a cognitive mechanism by which distance can regulate evaluative consistency, and describe both past research that can be reinterpreted in this light as well as more recent research that provides some direct support for our approach. We conclude by discussing implications for shared reality and social influence.
In two longitudinal studies, university students, their roommates, and parents assessed the quality and forecast the longevity of the students’ dating relationships. The longitudinal nature of this research allowed assessment of the relative accuracy of predictions offered by students and observers. Students assessed their relationships more positively, focusing primarily on the strengths of their relationships, and made more optimistic predictions than did parents and roommates. Although students were more confident in their predictions, their explicit forecasts tended to be less accurate than those of the two observer groups. Students, however, possessed information that could have yielded more accurate forecasts: In comparison to parents’ and roommates’ evaluations of relationship quality, students’ assessments of relationship quality were more predictive of stability at 1 year. Implications of these findings for understanding biases and accuracy in prediction are discussed.
Scenarios are stories that depict some future event. We reviewed the research in which scenarios were created either by researchers or by research participants with or without structured guidelines. Regardless of how scenarios are created, they have been shown to alter people’s expectations about the depicted events. Evidence suggests that the ease with which a scenario is imagined or constructed, or the plausibility of a scenario, upwardly biases beliefs that the depicted event could occur. In some instances, attitudes or behaviors consistent with the altered expectancies have been observed. For example, persons who imagined subscribing to cable television were more likely to have favorable attitudes toward cable television and to subscribe than those receiving standard sales information, and mental health clinic clients who imagined remaining in therapy for at least four sessions were less likely to drop out prematurely than clients who simply received information on remaining in therapy. Practitioners who wish to alter clients’ expectancies regarding specific events can provide scenarios that (a) depict the occurrence of an event using concrete examples (not abstract information), (b) contain representative events, (c) contain easily recalled supporting evidence, (d) contain events linked by causal connections, (e) ask clients to project themselves into the situation, (f) require clients to describe how they acted and felt in the situation, (g) use plausible elements in the story, (h) include reasons why the events occur, (i) require clients to explain the outcomes, (j) take into account clients’ experiences with the topic, and (k) avoid causing reactance or boomerang effects in clients who might resent blatant influence attempts. We make additional recommendations concerning the situation in which clients are exposed to scenarios and the use of multiple scenarios.
In everyday life people estimate completion times for projects in the near and distant future. How might the temporal proximity of a project influence prediction? Given that closer events elicit more concrete construals, we proposed that temporal proximity could enhance two kinds of concrete cognitions pertinent to task completion predictions: step-by-step plans and potential obstacles. Although these cognitions have opposite implications for prediction, and thus could cancel each other out, we hypothesized that temporal proximity would have a greater impact on cognitions that were relatively focal. Thus contextual factors that alter the relative focus on plans vs. obstacles should determine whether and how temporal proximity affects prediction. Six studies supported this reasoning. In contexts that elicited a focus on planning, individuals predicted earlier completion times for close than distant projects. In contexts that prompted a focus on obstacles, individuals predicted later completion times for close than distant projects.
Choice often produces conflict. This notion, however, plays no role in classical decision theory, in which each alternative is assigned a value, and the decision maker selects from every choice set the option with the highest value. We contrast this principle of value maximization with the hypothesis that the option to delay choice or seek new alternatives is more likely to be selected when conflict is high than when it is low. This hypothesis is supported by several studies showing that the tendency to defer decision, search for new alternatives, or choose the default option can be increased when the offered set is enlarged or improved, contrary to the principle of value maximization.
People typically underestimate the time necessary to complete their tasks. According to the planning fallacy model of optimistic time predictions, this underestimation occurs because people focus on developing a specific plan for the current task and neglect the implications of past failures to meet similar deadlines. We extend the classic planning fallacy model by proposing that a phenomenal quality of mental imagery – the visual perspective that is adopted – may moderate the optimistic prediction bias. Consistent with this proposal, participants in four studies predicted longer completion times, and thus were less prone to bias, when they imagined an upcoming task from the third-person rather than first-person perspective. Third-person imagery reduced people’s focus on optimistic plans, increased their focus on potential obstacles, and decreased the impact of task-relevant motives on prediction. The findings suggest that third-person imagery helps individuals generate more realistic predictions by reducing cognitive and motivational processes that typically contribute to bias.
Two studies examined the relative accuracy of subjects' self-predictions of their future behavior versus predictions made by others who knew them very well. Self-predictions were more accurate than those made by subjects' mothers or peers. This was especially true when negative outcomes were predicted, when predictions were made against the base rate, or when events with less extreme base rates were predicted. Subjects whose behavior was more atypical and those who described themselves as impulsive were more difficult to predict, both for themselves and generally for others. Differential accuracy is discussed in terms of the role of self-protective biases and the information base that is available for predictions.
This paper presents an approach to elicitation and correction of intuitive forecasts, which attempts to retain the valid component of intuitive judgments while correcting some biases to which they are prone. This approach is applied to two tasks that experts are often required to perform in the context of forecasting and in the service of decision making: the prediction of values and the assessment of confidence intervals. The analysis of these judgments reveals two major biases: non-regressiveness of predictions and overconfidence. Both biases are traced to people's tendency to give insufficient weight to certain types of information, e.g., the base-rate frequency of outcomes and their predictability. The corrective procedures described in this paper are designed to elicit from experts relevant information which they would normally neglect, and to help them integrate this information with their intuitive impressions in a manner that respects basic principles of statistical prediction.
The mental processes by which people construct scenarios, or examples, resemble the running of the simulation model. Mental simulation appears to be used to make predictions, assess probabilities and evaluate casual statements. A particular form of simulation, which concerns the mental undoing of certain events, plays an important role in the analysis of regret and close calls. Two rules of mental undoing are proposed. According to the downhill rule, people undo events by removing surprising or unexpected occurrences. According to the focus rule, people manipulate the entities on which they focus. The implications of the rules of undoing and mental simulation to the evaluation of scenarios are discussed. (Author)
Psychologically distant things are those that are not present in the direct experience of reality. There are different reasons for things not to be present in the immediate reality experienced by me. Things may belong to the past or to the future (e.g., my first year of marriage, my first year of school), to spatially remote locations (e.g., my parents' house, the North Pole), to other people (the way my best friend or a person from another culture perceives the present situation), and to hypothetical alternatives to reality, what could or might have been but never materialized (e.g., had I married another person or had I had wings). These alternatives to the directly experienced reality define, respectively, four dimensions of psychological distances--temporal distance, spatial distance, social distance, and hypotheticality. In each pair of examples of distal things, the first example is more proximal than the second. We would like to propose that in relation to psychological distance, these various distance dimensions are anchored on a single starting point (zero distance point), which is my direct experience of the here and now. Anything else--other times, other places, experiences of other people, and hypothetical alternatives to reality--is a mental construct. This analysis suggests a basic relationship between psychological distance and construal; that is, any distancing (i.e., moving beyond direct experience) involves construal. Based on construal-level theory, we distinguish between extents (levels) of construal and propose that more distal entities, which are more remote from direct experience, are construed on a higher level (i.e., involve more construal). The second section of this chapter discusses in more detail the concept of level of construal and the association between level of construal and psychological distance. That section addresses two implications of this association, namely, that psychological distance would produce higher levels of construal and that, conversely, high levels of construal would enhance perceived distance. The third section examines the effects of psychological distance on confidence in prediction, intensity of affective reactions, and evaluation and choice. We present evidence suggesting that the effects of various distance dimensions are similar to each other and are mediated by level of construal. The fourth section further proposes that the different psychological distances are interrelated and to some extent interchangeable. That is, distancing an object on one dimension may be exchanged for distancing the object on another dimension. (PsycINFO Database Record (c) 2012 APA, all rights reserved)
This study tested the hypothesis that group discussion moderates the tendency of attributors to underuse consensus information. In Study 1, high- or low-consensus information was associated with a description of a target person's behavior for 259 male and female Ss. Before rendering attributions, Ss spent 7 min either engaging in a group discussion, thinking about their judgment, or perusing attribution responses made by other Ss. Only the participants in the group-discussion conditions were affected by the consensus information. Three additional studies used procedures similar to those used by A. Vinokur and E. Burnstein (see record
1974-25207-001) to test a persuasive-arguments explanation of this group-discussion effect. The findings of these studies supported this view. (PsycINFO Database Record (c) 2012 APA, all rights reserved)
Experts are often called on to predict the performance of novices, but cognitive heuristics may interfere with experts' ability to capitalize on their superior knowledge in predicting novice task performance. In Study 1, experts, intermediate users, and novices predicted the time it would take novices to complete a complex task. In Study 2, expertise was experimentally manipulated. In both studies, those with more expertise were worse predictors of novice performance times and were resistant to debiasing techniques intended to reduce underestimation. Findings from these studies suggest that experts may have a cognitive handicap that leads to underestimating the difficulty novices face and that those with an intermediate level of expertise may be more accurate in predicting novices' performance. (PsycINFO Database Record (c) 2012 APA, all rights reserved)
Three studies tested hypotheses that temporal frames influence the group planning fallacy and are associated with subjective distance to deadlines and thoughts about successful task completion. Temporal framing effects occurred even though actual times to deadlines were held constant. In Study 1, groups predicted course project completion. Those adopting little time remaining frames exhibited less planning fallacy than those adopting lots of time remaining frames. Little time remaining frames were related to deadlines feeling closer and to fewer thoughts about success. Study 2 replicated this finding using a laboratory assembly task. Study 3 further indicated that it is whether thoughts about success come to mind easily, not thought content, that produces this effect; thoughts about success also led to deadlines feeling closer. (PsycINFO Database Record (c) 2012 APA, all rights reserved)
A review of the evidence for and against the proposition that self-serving biases affect attributions of causality indicates that there is little empirical support for the proposition in its most general form. Some support was found for the contention that individuals engage in self-enhancing attributions under conditions of success, but only minimal evidence suggested that individuals engage in self-protective attributions under conditions of failure. Moreover, it was proposed that the self-enhancing effect may not be due to motivational distortion, but rather to the tendency of people to (a) expect their behavior to produce success, (b) discern a closer covariation between behavior and outcomes in the case of increasing success than in the case of constant failure, and (c) misconstrue the meaning of contingency. (60 ref) (PsycINFO Database Record (c) 2012 APA, all rights reserved)
Two experiments addressed relations between judgmental processes and action by examining both the impact of the anchoring/adjustment heuristic on judgments of performance capabilities and the subsequent impact of these self-efficacy judgments on behavior. In Exp I, 62 undergraduates judged their capabilities for performance on a problem-solving task after exposure to ostensibly random anchor values representing either high or low levels of performance. Ss in a control condition received no anchor values. Anchoring biases strongly affected self-efficacy judgments. High-anchor Ss evidenced the highest judgments of their capabilities and low-anchor Ss the lowest judgments. Ss then performed the task. Differences in task persistence paralleled the differences in self-efficacy judgments, with high-anchor Ss displaying the highest level of task persistence. Exp II, with 23 high school students, replicated these results. In both studies, self-efficacy was predictive of both between-group differences and variations in performance within the anchoring conditions. (36 ref) (PsycINFO Database Record (c) 2012 APA, all rights reserved)
Cognitive and motivational processes underlying time prediction were studied in 5 experiments. Experiments 1–4 tested several debiasing techniques including decomposition, surprises, multiple scenarios (optimistic, best guess, pessimistic), anchoring and adjustment, social prediction, encoding (familiarity), and task performance delay. None of the manipulations resulted in significantly different predictions. Experiment 5 tested the effect of financial incentives. Contrary to expectations, participants given financial incentives for speed gave shorter predictions but performed the task no more quickly than those without incentives. Participants were motivated to be wishful thinkers but not more capable doers. Three practical implications result: (a) Formal prediction methods may not be as accurate as assumed, (b) social forecasting is not necessarily a prediction panacea, and (c) those who schedule tasks should pay particular attention to actors' motivations. (PsycINFO Database Record (c) 2012 APA, all rights reserved)