Planning Fallacy, explained.
The planning fallacy is a tendency to underestimate the time or resources needed for a task, even when similar past tasks took longer than expected.
Why it happens
An inside view focuses on the plan working as intended. An outside view asks how comparable projects actually performed, including interruptions and revisions. A buffer can help, but its size should reflect relevant experience rather than an arbitrary feeling of caution.
Forecasting only the imagined plan can miss variation from similar past projects.
Read the result
Compare the best-case estimate with the simulated completion distribution and the deadline including your buffer. These generated delays are teaching examples, not evidence about your actual project.
A worked example
An eight-day plan
A team estimates eight days of direct work and promises delivery in eight calendar days.
It adds a 25% buffer, moving the deadline to ten days, then compares it with delays seen on similar projects.
Two extra days may still be insufficient. A realistic estimate needs a reference class, not just a percentage added to an optimistic plan.
OPTIONAL DEEPER DETAILGo deeper: inside the model
Inside this model
A seeded teaching sample adds delay of 0–12 days to the best-case estimate across 100 hypothetical projects. The buffer adds estimate×buffer/100; the plot compares budgeted time and the sampled completion distribution.
Where this idea is useful
A practical use
Use outcomes of previous similar tasks to set a schedule, then compare your planned buffer.
A common misconception
“Adding any buffer makes an estimate realistic.”
The starting estimate may already omit substantial work. A buffer is useful only when its adequacy is checked against a relevant range of outcomes.
What this explanation leaves out
- Uniform delay is illustrative, not a calibrated reference class for your project.
What is a reference class?
A group of sufficiently similar completed tasks whose actual outcomes can inform the new estimate. Choosing comparable work matters as much as collecting a large sample.
What happened on the last several projects that resembled this one?
Associated thinkers
Further reading
Explore the original research or the teaching reference behind this experiment.