TFS: Chapter 23


Chapter 23 is titled The Outside View. The focus is on a planning fallacy and how to mitigate it using reference class forecasting.

People with information about a case rarely look at information about the class to which the case belongs. If the case is a building project that can lead people to be overly optimistic. Getting an outside view of comparable previous projects can lead to better cost and time estimates. It can also let those making the decisions decide whether to even proceed with the project.

Kahneman does mention that if everyone used an outside view and everyone viewed risk appropriately far fewer small businesses would be started, however. Chapter 24 has capitalism in the title so my guess is that he expands on that next.

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