As risk managers we exhort design professionals to plan their projects properly, allocating enough time and resources to complete the project. If it were only that simple. Social scientists have shown that our capability to predict how much time it will take to complete a future task is often overly optimistic. It turns out that we consistently underestimate the amount of time it will take us to complete a task. This is known as the planning fallacy and this cognitive bias means that deadlines are not met. You can find more in depth discussion of the planning fallacy and the studies documenting this cognitive bias at http://en.wikipedia.org/wiki/Planning_fallacy.
There are major infrastructure projects that are often used as examples of the planning fallacy. Boston’s big dig and Denver International Airport come to mind. The most recent is the World Trade Center Transportation Hub in New York. The expected cost is now over $4 billion, almost twice the original estimate. It is expected to open in 2015 (barring any additional delays); the original promise was that it would start operating in 2009. There are a myriad of reasons as to why the initial projections were so wrong. Whether you are drafting your business plan for next year or the next project proposal, you should at least be aware of the likely effect of the planning fallacy on your estimates.