Delusions of Success: Comment on Dan Lovallo and Daniel Kahneman
Dan Lovallo and Daniel Kahneman must be commended for their clear identification of causes and cures to the planning fallacy in, “Delusions of Success: How Optimism Undermines Executives’ Decisions” (July 2003). Their look at overoptimism, anchoring, competitor neglect, and the outside view in forecasting is highly useful to executives and forecasters. However, Lovallo and Kahneman underrate one source of bias in forecasting — the deliberate “cooking” of forecasts to get ventures started. My colleagues and I call this the Machiavelli factor.