Consumers Commit the Planning Fallacy For Time But Not For Money

Stephen Spiller, Duke University, USA
John G. Lynch, Duke University, USA
Individuals consistently believe that their optimistically biased predictions of project durations are accurate, while simultaneously acknowledging their tendency to make biased predictions. This planning fallacy is typically studied in the domain of time expenditures; consumers make plans for money expenditures as well, but the literature often conflates money misprediction with time misprediction. In three studies, we find that the planning fallacy is absent or much reduced for money relative to time, using both self-reported tendencies and actual predictions and expenditures. We hypothesize that this cross-resource difference exists because consumers constrain money expenditures more successfully than they constrain time expenditures in order to meet their predictions.
[ to cite ]:
Stephen Spiller and John G. Lynch (2009) ,"Consumers Commit the Planning Fallacy For Time But Not For Money", in NA - Advances in Consumer Research Volume 36, eds. Ann L. McGill and Sharon Shavitt, Duluth, MN : Association for Consumer Research, Pages: 1040-1041.