Question: In 2002 a survey of American homeowners who had
“ In 2002, a survey of American homeowners who had remodeled their kitchens found that, on average, they had expected the job to cost $ 18,658; in fact, they ended up paying an average of $ 38,769” (Kahneman, 2011, p. 250). The quote is an example of what Kahneman calls the planning fallacy, which describes “plans and forecasts that are unrealistically close to best case scenarios, [and that] could be improved by consulting the statistics of similar cases” (p. 250). Explain how each of the following concepts from this chapter could have contributed to the planning fallacy for the kitchen remodeling example.
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