Anchoring in Project Duration Estimation

32 Pages Posted: 23 Aug 2018 Last revised: 13 Apr 2019

See all articles by Matej Lorko

Matej Lorko

Macquarie University - Macquarie Graduate School of Management

Maroš Servátka

Macquarie Graduate School of Management - MGSM Experimental Economics Laboratory

Le Zhang

Macquarie University - Macquarie Graduate School of Management; Macquarie University, Macquarie Business School

Date Written: March 19, 2019

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.

Keywords: Project Management, Project Planning, Time Management, Anchors, Anchoring Effect, Task Duration, Duration Estimation, Time Estimation, Anchoring Bias

JEL Classification: C91, D83, D91, O21, O22

Suggested Citation

Lorko, Matej and Servátka, Maroš and Zhang, Le, Anchoring in Project Duration Estimation (March 19, 2019). Macquarie University Faculty of Business & Economics Research Paper. Available at SSRN: https://ssrn.com/abstract=3230550 or http://dx.doi.org/10.2139/ssrn.3230550

Matej Lorko

Macquarie University - Macquarie Graduate School of Management ( email )

Australia

Maroš Servátka (Contact Author)

Macquarie Graduate School of Management - MGSM Experimental Economics Laboratory ( email )

Sydney
Australia

Le Zhang

Macquarie University - Macquarie Graduate School of Management ( email )

Macquarie University, Macquarie Business School ( email )

New South Wales 2109
Australia

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