The Failure of Invariance

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Indexed  July 31, 2010

When there is a discussion around PERT, the Central Limit Theorem, estimating durations, efforts, and costs, or any probabilistic or statistical aspect of a project, there is usually a fundamental flaw in the thought process.When we estimate, we are ALWAYS subject to anchoring and adjustments. It is built into our nature. No matter how well you rationalize the processes for capturing estimates, you cannot avoid anchoring and adjusting. Recognition and correction for anchoring and adjusting is the only way out. The estimates are still biased, they are now recognized as biased.The core of the Kahneman and Tversky thesis is the contention that people frequently form estimates by starting with a...   See the complete post here