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Uniqueness Bias: Why It Matters, How to Curb It

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  • Bent Flyvbjerg
  • Alexander Budzier
  • M. D. Christodoulou
  • M. Zottoli

Abstract

The paper explores "uniqueness bias," a behavioral bias defined as the tendency of planners and managers to see their decisions as singular. For the first time, uniqueness bias is correlated with forecasting accuracy and performance in real-world project investment decisions. We problematize the conventional framing of projects as unique and hypothesize that it leads to poor project performance. We test the thesis for a sample of 219 projects and find that perceived uniqueness is indeed highly statistically significantly associated with underperformance. Finally, we identify how decision makers can mitigate uniqueness bias in their projects through what Daniel Kahneman aptly called "decision hygiene," specifically reference class forecasting, premortems, similarity-based forecasting, and noise audits.

Suggested Citation

  • Bent Flyvbjerg & Alexander Budzier & M. D. Christodoulou & M. Zottoli, 2024. "Uniqueness Bias: Why It Matters, How to Curb It," Papers 2408.07710, arXiv.org.
    • Handle: RePEc:arx:papers:2408.07710
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    References listed on IDEAS

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    1. Dan Lovallo & Carmina Clarke & Colin Camerer, 2012. "Robust analogizing and the outside view: two empirical tests of case‐based decision making," Strategic Management Journal, Wiley Blackwell, vol. 33(5), pages 496-512, May.
    2. Bent Flyvbjerg, 2014. "What You Should Know About Megaprojects, and Why: An Overview," Papers 1409.0003, arXiv.org.
    3. Bent Flyvbjerg & Alexander Budzier & Jong Seok Lee & Mark Keil & Daniel Lunn & Dirk W. Bester, 2022. "The Empirical Reality of IT Project Cost Overruns: Discovering A Power-Law Distribution," Papers 2210.01573, arXiv.org.
    4. Flyvbjerg, Bent, 2018. "Planning Fallacy or Hiding Hand: Which is the Better Explanation?," World Development, Elsevier, vol. 103(C), pages 383-386.
    5. Gigerenzer, Gerd, 2018. "The Bias Bias in Behavioral Economics," Review of Behavioral Economics, now publishers, vol. 5(3-4), pages 303-336, December.
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