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optimism bias

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The tendency for people to be optimistic about future events, especially those seen as following from their own plans and actions. Although optimism is no doubt a stimulus to enterprise, it has obvious dangers: these include increased risk taking, failure to estimate probabilities accurately, and inadequate contingency planning. In drawing up plans, schedules, and budgets there is a demonstrated tendency for managers to underestimate costs and duration and to overestimate benefits. This being so, there is now an explicit requirement for those managing government projects in the UK to include an adjustment for optimism bias.

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