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Reference Class Forecasting - Definition and examples — Conceptually

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How long will your project take? How much will it cost? Increase your accuracy with reference class forecasting.

Definition and explanation Reference class forecasting is a method of predicting the future by looking at similar past situations and their outcomes. Kahneman and Tversky found that human judgment is generally optimistic due to overconfidence and biases. People tend to underestimate the costs, completion times, and risks of their actions, whereas they tend to overestimate the benefits. Such errors are caused by actors taking an "inside view", assessing the information readily available to them, and neglecting other considerations. Taking the “outside view” — looking at events similar to…

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