“Time is free, but it’s priceless. You can’t own it, but you can use it. You can’t keep it, but you can spend it. Once you’ve lost it you can never get it back.” — Harvey Mackay
Time and resource estimation biases can impact our decision-making and cause us to overestimate or underestimate the time and resources needed for a project.
In this list, we will explore 20 common biases that can lead to inaccurate time and resource estimations, including the Anchoring Bias, Confirmation Bias, and Planning Fallacy.
Understanding these biases can help us make more informed decisions and avoid costly mistakes.
What are Time and Resource Estimation Biases?
Time and resource estimation biases refer to the tendency of individuals to systematically misjudge the amount of time, effort, or resources required to complete a task or project.
These biases can lead to problems such as underestimation of costs, missed deadlines, and project failure.
People tend to be overly optimistic when estimating how long it will take to complete a task or how much money or resources will be needed.
They may also underestimate the impact of unexpected events, delays, and difficulties that may arise during the project.
Time and Resource Estimation Biases
Here are some common examples of time and resource estimation biases:
- Anchoring Bias: This bias occurs when an individual relies too heavily on an initial piece of information when making a decision or estimation.
- Bandwagon Effect: The bandwagon effect refers to the tendency of people to adopt certain behaviors, beliefs, or opinions simply because they are popular or widely accepted.
- Belief Bias: This bias occurs when an individual’s pre-existing beliefs or opinions affect their ability to make accurate judgments or estimations.
- Clustering Illusion: This is the tendency to see patterns in random events, often leading to overestimation of the frequency or likelihood of an event.
- Confirmation Bias: The confirmation bias is the tendency to seek out or interpret information in a way that confirms one’s pre-existing beliefs or opinions.
- Endowment Effect: This is the tendency to overvalue something simply because one owns it.
- Focusing Effect: This bias occurs when individuals place too much emphasis on a single aspect of a situation or event, often leading to inaccurate judgments or estimations.
- Hindsight Bias: This is the tendency to believe, after an event has occurred, that one would have predicted or expected the outcome.
- Illusory Superiority: This is the tendency to overestimate one’s own abilities or performance in a certain area.
- Information Bias: This bias occurs when individuals believe that having more information will lead to better decisions, when in reality it can lead to overestimation or inaccuracy.
- Normalcy Bias: This is the tendency to underestimate the likelihood or severity of a potential threat or disaster.
- Omission Bias: The omission bias is the tendency to judge harmful actions as worse than harmful omissions, even when the outcome is the same.
- Optimism Bias: This is the tendency to overestimate the likelihood of positive outcomes and underestimate the likelihood of negative outcomes.
- Outcome Bias: This bias occurs when individuals judge a decision based solely on its outcome, rather than taking into account the decision-making process.
- Planning Fallacy: This is the tendency to underestimate the amount of time or resources required to complete a project or task.
- Pro-innovation Bias: The pro-innovation bias is the tendency to overestimate the value or usefulness of new technologies or ideas.
- Pseudocertainty Effect: This bias occurs when individuals believe that the outcome of a decision is certain, even when it is not.
- Sunk Cost Fallacy: This is the tendency to continue investing time, money, or resources into a project or decision, even when it no longer makes sense to do so.
- Zero-risk Bias: This is the tendency to prefer options that have no risk, even if they are not the most effective or efficient choice.
10 Examples of How To Use Time and Resource Estimation Biases to Think and Do Better
Here are 10 examples of how knowing the time and resource estimation biases can help you think and do better:
- Anchoring Bias: When estimating the time or resources needed for a task or project, start with a realistic estimate rather than being influenced by an initial estimate that may be too high or low. An interesting example of the anchoring bias in terms of time and resource estimation biases is when a project manager sets an initial deadline for a project and then all subsequent estimations are based around that initial deadline. Even if it becomes clear that the deadline is unrealistic, people may still work towards it because it has become an anchor point. This can result in poor resource allocation and time management, leading to delays and subpar results.
- Belief Bias: Avoid making assumptions or decisions based on your pre-existing beliefs or expectations, and instead gather new information objectively. An interesting example of the belief bias in terms of time and resource estimation biases is when a manager believes that a project can be completed within a short timeframe because they have successfully completed similar projects in the past. This bias can lead to underestimating the amount of time and resources required for the current project, leading to delays and budget overruns. In this case, the belief that the project can be completed quickly is not based on an objective evaluation of the current project’s requirements and constraints, but rather on a pre-existing belief based on past experiences.
- Confirmation Bias: Seek out evidence that contradicts your initial estimate of time or resources, to avoid being overly confident or making assumptions. An interesting example of the confirmation bias in terms of time and resource estimation biases could be when a project manager expects a particular project to take a specific amount of time, and then only looks for information that confirms their expectations. They may ignore or downplay information that suggests the project will take longer, resulting in unrealistic time and resource estimates. This bias can lead to delays and overruns if not addressed.
- Endowment Effect: When making decisions about resources, focus on their value and utility rather than their possession or ownership. An interesting example of the Endowment Effect in terms of time and resource estimation biases is when a person overvalues their own possessions or resources. For instance, imagine a company that has invested a significant amount of time and money into a new project. The project is not going as planned, but the team members are emotionally attached to it and feel that they have invested too much to abandon it. As a result, they may overvalue the project and continue to allocate resources to it, even if it is not a wise use of their time and resources. This can lead to the sunk cost fallacy, where people feel like they have invested too much to quit, and therefore continue to invest resources into a failing project.
- Focusing Effect: When making decisions about resources, consider all factors that may be relevant rather than focusing on only one or two. An example of the Focusing Effect in terms of time and resource estimation biases is when individuals overemphasize one aspect of a project or task and allocate more resources to it, while neglecting other important aspects. For instance, a team might focus too much on developing a product’s design and overlook other key features such as functionality, reliability, and customer needs. As a result, the team may run out of time and resources, leading to delays, cost overruns, or poor quality.
- Normalcy Bias: Avoid assuming that things will always go according to plan, and plan for contingencies or unexpected changes. An example of the normalcy bias in terms of time and resource estimation biases is when individuals underestimate the likelihood and impact of an unexpected event or crisis, assuming that things will always remain the same or return to normal, without adequately preparing for the potential consequences. For instance, people may fail to prepare for natural disasters such as hurricanes or earthquakes, assuming that such events are rare and unlikely to occur, leading to inadequate resource allocation and poor decision-making in the face of an actual crisis.
- Optimism Bias: While it’s important to stay positive, avoid assuming that everything will go smoothly and allocate resources and time accordingly, taking into account possible challenges and setbacks. An example of optimism bias in terms of time and resource estimation biases is when a project manager underestimates the time and resources required to complete a project, assuming that things will go smoothly and without any obstacles, which can lead to missed deadlines and cost overruns.
- Planning Fallacy: When planning a project or task, allocate more time and resources than initially estimated to avoid running out of time or resources at the last minute. An example of the Planning Fallacy is when a construction project manager estimates that a building will be completed within 12 months, despite similar projects taking an average of 18 months to complete. The manager underestimates the time required to complete the project, leading to delays, cost overruns, and other issues.
- Pro-Innovation Bias: To protect against this bias, it is important to conduct thorough cost-benefit analyses and risk assessments before embarking on new projects or adopting new technologies. This bias can lead individuals to underestimate the amount of time and resources required to implement a new innovation, such as a new software system or product line, resulting in missed deadlines and over-budget projects. For example, a company may invest heavily in a new technology without fully considering the long-term costs and risks associated with its implementation, leading to financial losses and setbacks.
- Sunk Cost Fallacy: Avoid continuing to invest time or resources in a project or task simply because you have already invested time or resources, and consider if it is still the best use of your time and resources moving forward. An example of the Sunk Cost Fallacy is when a business invests a lot of money and resources in a project, but it becomes clear that the project will not be profitable. Instead of cutting their losses and moving on, they continue to invest more resources in the project because they feel like they have already invested too much to abandon it. This can result in even greater losses for the business.
Know Your Time and Resource Estimation Biases to Think and Do Better
Time and resource estimation biases can significantly affect our decision-making process, leading to suboptimal outcomes.
However, by being aware of these biases and taking steps to mitigate their impact, we can make more informed and effective decisions.
As with any biases, it is important to remain open-minded, seek out diverse perspectives, and challenge our assumptions to avoid falling prey to these cognitive traps.
Ultimately, by understanding these biases and actively working to overcome them, we can improve our ability to plan, manage, and achieve our goals.
You Might Also Like
Big List of Biases
Attitude and Belief Biases
Investment and Commitment Biases
Perception and Memory Biases
Probability and Randomness Biases
Research and Writing Biases
Social Influence and Conformity Biases
Scotoma: Why You Can’t See What’s Right in Front of You
How Labeling Others Distorts Your Thinking
How To Improve Your Critical Thinking
How To Practice Precision Questions and Answers