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Anchoring in project duration estimation

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  • Lorko, Matej
  • Servátka, Maroš
  • Zhang, Le

Abstract

The success of a business project often relies on the accuracy of its schedule. Inaccurate and overoptimistic schedules can lead to significant project failures. In this paper, we explore whether the presence of anchors, such as relatively uninformed suggestions or expectations of the duration of project tasks, play a role in the project estimating and planning process. Our laboratory experiment contributes to the methodology of investigating the robustness and persistence of the anchoring effect in the following ways: (1) we investigate the anchoring effect by comparing the behavior in low and high anchor treatments with a control treatment where no anchor is present; (2) we provide a more accurate measurement by incentivizing participants to provide their best duration estimates; (3) we test the persistence of the anchoring effect over a longer horizon; (4) we evaluate the anchoring effect also on retrospective estimates. We find strong anchoring effects and systematic estimation biases that do not vanish even after the task is repeatedly estimated and executed. In addition, we find that such persisting biases can be caused not only by externally provided anchors, but also by the planner's own initial estimate.

Suggested Citation

  • Lorko, Matej & Servátka, Maroš & Zhang, Le, 2019. "Anchoring in project duration estimation," Journal of Economic Behavior & Organization, Elsevier, vol. 162(C), pages 49-65.
  • Handle: RePEc:eee:jeborg:v:162:y:2019:i:c:p:49-65
    DOI: 10.1016/j.jebo.2019.04.014
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    Cited by:

    1. Lorko, Matej & Servátka, Maroš & Zhang, Le, 2019. "How to Improve the Accuracy of Project Schedules? The Effect of Project Specification and Historical Information on Duration Estimates," MPRA Paper 95585, University Library of Munich, Germany.

    More about this item

    Keywords

    Project management; Project planning; Time management; Anchors; Anchoring effect; Task duration; Duration estimation; Time estimation; Anchoring bias;

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D92 - Microeconomics - - Micro-Based Behavioral Economics - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
    • O21 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Planning Models; Planning Policy
    • O22 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Project Analysis

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