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The Icarus Paradox

daftandbarmy

Army.ca Dinosaur
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Don't situate the estimate.... :)

The Icarus Paradox

"Failures in business projects happen all too often. Firms tend to invest too much and too long in activities that are elementally inoperative in its design or concept. Standard economic theory explains the high rate of failures as an inevitable result of companies taking rational risks in the face of uncertain situations. The rewards of a few successes outweigh losses incurred from many failures in the long run. Executives know this and accept the risk. This theory absolves them from blame – they were simply making rational risks after all. Lovallo and Kahneman argue, however, that most of these failures are actually the results of flawed decision making. When predicting the outcomes of risky projects, executives easily fall victim to what psychologists call the planning fallacy. They make decisions based on delusional optimism instead of on rational weighing of gains, losses and probabilities. They spin scenarios of success while overlooking potential problems. Consequently, they pursue initiatives that are unlikely to succeed. Research into human cognition has traced this over-optimism to many sources."

https://en.wikipedia.org/wiki/Icarus_paradox
 
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