The Inside View and the Outside View

Daniel Kahneman, in Thinking, Fast and Slow , tells a story about his experience in a group of people who were writing a book. They had worked a few months and written a couple of chapters.

So Daniel decided to run a little experiment. He asked the members of the group how long they thought it would take to finish the book. To ensure that he got the best estimate, he asked all of the members to estimate the length of time independently.

He then collected the estimates and found that the average length of time that they thought it would take was 1.5 years and the values ranged from 1 to 2 years.

Then he realized that one of the members of the group was an experienced publisher of such books. So Daniel asked him what he knew of the experiences of other groups like theirs. He thought carefully and said that groups like them usually took 8 to 10 years to finish a book like theirs and as many as 40% never finished. Daniel felt that this expert was providing an outside view of the project.

The group did what most people do with such information. They ignored it and persevered. They felt that their situation was different from the experiences of other groups because they had an inside view of their capabilities.

It eventually took 7 years to finish the book.

The problem, Kahneman suggests, is that people are unable to go from general results to specific cases. Therefore, they can seldom utilize the potential benefits of an outside view.