The report, titled “Delusions of Success: Comment on Dan Lovallo and Daniel Kahneman,” by Bent Flyvbjerg, examines the issue of biased forecasting in business decisions, particularly the “planning fallacy.” Flyvbjerg praises Lovallo and Kahneman for identifying causes such as over-optimism, anchoring, and competitor neglect. However, he argues that they underestimate the impact of deliberate manipulation or “cooking” of forecasts due to organisational pressures—a phenomenon he refers to as the “Machiavelli factor.”
Flyvbjerg’s research reveals that in cases like capital-investment transport projects, forecasters often face significant political pressures to present overly optimistic projections. These pressures result in repeated cost overruns and demand shortfalls over decades, which he contends cannot simply be explained by over-optimism or inexperience. Instead, these consistent errors suggest deliberate manipulation rather than accidental bias, pointing to political rather than psychological causes.
Flyvbjerg concludes that when forecasts are deliberately skewed, the remedies suggested by Lovallo and Kahneman, such as adopting an “outside view,” are less likely to be effective, as there is little incentive for those involved to correct their biases.