CONCEPT
The Planning Fallacy
The systematic tendency — documented by Flyvbjerg across hundreds of megaprojects — to overestimate benefits, underestimate costs, and believe that statistical regularities governing comparable cases will be suspended for yours. The oldest and most expensive cognitive pathology in the history of large-scale human enterprise.
The planning fallacy is Flyvbjerg's career-defining empirical finding: large-scale projects systematically overrun their budgets, miss their deadlines, and underdeliver on their promised benefits, with a consistency so reliable across decades, countries, political systems, and infrastructure categories that it has acquired the monotony of a physical constant. Transportation infrastructure averages 28 percent cost overruns for roads and 45 percent for rail — and these are averages, meaning the distribution includes projects that exceeded estimates by multiples, not percentages. The Sydney Opera House came in 1,400 percent over budget. The Scottish Parliament exceeded its estimate by a factor of ten. The pattern does not improve over time. Flyvbjerg's explanation: two reinforcing mechanisms — optimism bias and strategic misrepresentation — operating beneath the threshold of institutional self-awareness.
In The You On AI Field Guide
The fallacy was first named by Daniel Kahneman and Amos Tversky in 1979 as a cognitive bias observed