By Dan Monheit 15.07.22
Question submitted by Julie, Auckland
It’s not just you, Julie. So many of us have spent big chunks of the last two years wistfully dreaming of that daybed in Positano. Yes, the one with the perfect balance between direct sun and shade, where we’ll spend precisely four and a half days sipping ice-cold Aperol Spritz before jetting off on the 17:40 flight to Old Town Dubrovnik.
From there, it’s a three-night stop on the Greek island of Ios, a short flight to Munich for Oktoberfest and then a scenic, six-hour train ride straight into the heart of Paris! Or so the plan goes…
Cut to reality, and the wheels have come off before the SPF30 has even made it out of the suitcase. Positano didn’t get the message, and the daybeds are all taken. There’s a freak storm on the way that will blanket the Italian coastline, and the bartender is all out of Aperol. Out of Aperol? Is that even possible? If you stay for the sunny days, then Paris must be cut from the itinerary, and Munich is already looking shaky.
The plan was airtight! How did this happen? Sure, other people’s holidays go wrong, but that’s because they don’t plan things like Julie plans things. Am I right, or am I right?
Planning Fallacy describes our tendency to hold a confident belief that our own vacations, estimations and projects will proceed as planned, even with the knowledge that the vast majority do not.
Planning Fallacy was first coined by Psychologists Daniel Kahneman & Amos Tversky in 1979 when the duo dug deep into why human beings are so astonishingly bad at estimating how long it will take to complete tasks. From there, Planning Fallacy has been demonstrated in the real world time and again (though probably less often than anticipated. See what I did there?).
A 2005 study examined worldwide rail projects that had taken place between 1969 and 1998. Each project was assessed on how many passengers the project’s planners had estimated would use the new train line and compared this estimate with how many passengers did.
In more than 90% of cases, the number of passengers was greatly overestimated. Despite new data on population and commuters consistently surfacing over the three decades, on average, project planners overestimated how many people would use the new rail projects by over 100%! Not only were they bad at predicting, but they also failed to learn from their mistakes or take on new information as it became available.
So what do their trains have to do with your plans? I’m glad you asked.
When planning our perfect vacay, we’re a little too good at minimising the ‘bad stuff’ that’s all but inevitable. You know, the extended travel times, the lines at security and the cost of everything from taxis to water. Then there are the flight delays, the double booked hotel rooms and the ear infection/food poisoning/’is that a cold or is that Covid?’ that is just par for the course. So instead, we believe, despite news reports, other people’s stories and personal experiences, that everything will work out just the way we planned. I mean, it’s all in a spreadsheet, so how could it not?
For brands, Planning Fallacy works best when customers get to self project how much or how often they’ll use you. Whether it’s gym classes, car washes or ‘VIP experiences’, chances are their aspirations will be far greater than their reality. Especially if there’s Aperol on the menu.
Bad Decisions Podcast
Learn more about the Planning Fallacy in episode 14 of the Bad Decisions podcast.
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Read Dan’s piece with Mi-3 on what Red Bull, Nespresso, Aldi — and behavioural science — can teach us about brand framing and context over content here.