Psychological Aspects of Estimating presented by Agile Psychologist Joseph Pelrine at the McKinsey Digital Labs University of Central Lancashire - V 1.7

1. Psychological Aspects
of Es2ma2on
Joseph Pelrine @josephpelrine
McKinsey Digital Labs
University of Central Lancashire
V 1.7

2. Neural Correlates of Subjec2ve
Temporal Percep2on Error
Joseph Pelrine
University of Central Lancashire

3. Why you suck at es2ma2ng…
and what you can do about it
Joseph Pelrine
McKinsey Digital Labs

4. In the beginning was the gummy bear

5. Who

6. Kruger &
Dunning, 1999
Ames &
Kammrath, 2004

7. Kurtz & Snowden, 2003 Maguire et al., 2000

8. Weick & Guinote, 2010

9. Buehler et al., 2005

10. Why

11. Aranda, 2005

12. How many Elephant Points are there in the veldt? Let’s
conduct a poll of the herds. Herd A reports 50,000 kg.
Herd B reports 84 legs. Herd C reports 92,000 lb. Herd D
reports 24 head. Herd E reports 546 elephant sounds per
day. Herd F reports elephant skin RGB values of #c0c0c0.
Herd G reports an average height of 11 ft. So, there are
50,000 + 84 + 92,000 + 24 + 546 + #c0c0c0 + 11 =
142,857 Elephant Points in the veldt. The average herd
has 20,408.142857143 Elephant Points. We know this is a
useful number because there is a decimal point in it.
- Dave Nicolette

13. Rela2ve Es2ma2ng
Asch, 1956

14. Carroll, 2016

16. Lovallo & Kahneman, 2003
Jones & Euske, 1991

17. Baumeister, 2002

18. Vohs et al., 2005

19. Danziger et al., 2011

21. The month before
The month aer
Boroditsky, 2001

22. järki = reason, sense, intelligence
järjestää = organize
järjestelmä = organiza2on
järjestelmällinen = organized
järjestelmällisty_ää = organiza2onalize
epäjärjestelmällisty_ää = unorganiza2onalize
epäjärjestelmällisty_ämätön = having unreflec2onal a_en2on to an2unorganiza2onalize
epäjärjestelmällisty_ämä_ömyys = unreflec2onal a_en2on to an2unorganiza2onalize
epäjärjestelmällisty_ämä_omyydellä = with unreflec2onal a_en2on to
an2unorganiza2onalize
epäjärjestelmällisty_ämä_ömyydellään = with his unreflec2onal a_en2on to
an2unorganiza2onalize
epäjärjestelmällisty_ämä_ömyydelläänkö = is it with his unreflec2onal a_en2on to
an2unorganiza2onalize?
epäjärjestelmällisty_ämä_ömyydelläänköhän = I wonder if it is possible, with his
unreflec2onal a_en2on to an2unorganiza2onalize?
epäjärjestelmällisty_ämä_ömyydelläänköhänkään? = I wonder if it is possible, even
with his unreflec2onal a_en2on to an2unorganiza2onalize?

23. Shaw & Porter, 2015

24. Lous & Palmer, 1974
Collided
Bumped
Contacted
Hit
Smashed
63.25
61.32
51.18
54.72
65.66

25. Bargh, 1996

26. Ego vs. Time Perspec2ve
“as we approach the end of the week” “Friday arrived before we knew it”
Boltz & Yum, 2010

27. Amos Tversky Daniel Kahnemann

29. Planning Fallacy
“The planning fallacy is a consequence of the tendency
to neglect distribu2onal data, and to adopt what may
be termed an 'internal approach' to predic2on, where
one focuses on the cons2tuents of the specific problem
rather than on the distribu2on of outcomes in similar
cases. The internal approach to the evalua2on of plans
is likely to produce underes2ma2on. “
Kahneman & Tversky, 1977

32. How

33. Forecas2ng Velocity
The quality of any forecast
depends on three factors:
• How well we understand the
factors involved
• How much data is available
• Whether the forecast can affect
what is being forecast
Hyndman & Athanasopoulos, 2013

34. Moving Window Average
St =
yt + yt 1 + . . . + yt (n 1)
n
=
1
n
n 1X
i=0
yt i
St = smoothed value at t
yt = data value at t
n = number of observa2ons to average

35. The Problem
St =
yt + yt 1 + . . . + yt (n 1)
n
=
1
n
n 1X
i=0
yt i
Are all these data points equal in importance?

36. Exponen2ally Weighted Moving Average
St = ↵yt + (1 ↵)St 1
St = smoothed value at t
yt = data value at t
α = smoothing constant, 0 ≤ α ≤ 1

37. 60
70
80
90
100
110
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22
Raw Data
Holt-Winters
Moving Window

38. The obligatory code slide
stuff <- read.table(fName, header=FALSE)
foo <- HoltWinters(stuff[,1], beta=FALSE, gamma=FALSE)
fittedData <- fitted(foo)[,1]
write.table(fittedData, outFName, quote=FALSE,
row.names=FALSE)

39. Reference class forecas2ng

40. Reference class forecas2ng
Step 1 - Iden2fy a relevant reference class of past, similar projects (broad
enough to generate a decent sample size, but narrow enough to be specific)
Step 2 - Establish a probability distribu2on for that class
Step 3 - Compare the specific project to the reference class distribu2on,
regressing the forecaster's es2mates toward the average of the reference
class & extending the credible interval toward the corresponding interval for
the class
Ask simple ques2ons which force es2mators to take an outside view
Ask experts about previous similar projects
Flyvbjerg, 2008

41. Comfort Level
Pelrine, 2000

42. Sample Likert Scale
1 2 3 4 5
strongly
disagree
mildly
disagree
neutral mildly
agree
strongly
agree
Twi_ering during sessions should be prohibited.

43. Fear
Risk
Information

44. Chronobiology
• Circadian – cycle 2me ca. 1 day
• Diurnal – circadian, mediated by ambient light
• Infradian – cycle 2me > 1 day
• Ultradian – cycle 2me < 1 day

45. Chronobiology
Kleitman, 1957

47. Basic Rest-Ac2vity Cycle
9
:
0
0
1
0
:
0
0
1
1
:
0
0
1
2
:
0
0
1
3
:
0
0
1
4
:
0
0
1
5
:
0
0
1
6
:
0
0
1
7
:
0
0
Broughton, 1975

48. Basic Rest-Ac2vity Cycle
9
:
0
0
1
0
:
0
0
1
1
:
0
0
1
2
:
0
0
1
3
:
0
0
1
4
:
0
0
1
5
:
0
0
1
6
:
0
0
1
7
:
0
0
Here you are not produc2ve

53. Shelf life

54. Es2mates have a shelf life of maximum
1 Sprint. Task breakdowns do too.

55. Unpacking – Task Breakdown
Kruger & Evans, 2004

56. Take Short Rests
Tyler & Burns, 2008

57. Have a Posi2ve Awtude
Tice et al., 2007

58. Use Glucose
Gailliot et al., 2007

59. References
• Ames, D.R. & Kammrath, L.K. (2004) Mind-Reading and Metacogni2on: Narcissism, not Actual
Competence, Predicts Self-Es2mated Ability. Journal of Nonverbal Behavior, 28, 187-209.
• Aranda, J. (2005) Anchoring and adjustment in so:ware es<ma<on. University of Toronto. Available at:
h_p://www.cs.utoronto.ca/~jaranda/pubs/MScThesis-JorgeAranda.pdf
• Asch, S.E. (1956) Studies of independence and conformity: I. A minority of one against a unanimous
majority. Psychological monographs: General and applied, 1-70.
• Baumeister, R.F. (2002) Ego Deple2on and Self-Control Failure: An Energy Model of the Self’s Execu2ve
Func2on. Self and Iden<ty, 1, 129-136.
• Baumeister, R.F. & Heatherton, T.F. (1996) Self-Regula2on Failure: An Overview. Psychological Inquiry, 7,
1-15.
• Bargh, J.A. et al. (1996) Automa2city of social behavior: Direct effects of trait construct and stereotype
ac2va2on on ac2on. Journal of personality and social psychology, 71, 230-244.
• Boltz, M.G. & Yum, Y.N. (2010) Temporal concepts and predicted dura2on judgments. Journal of
Experimental Social Psychology, 46, 895-904.
• Boroditsky, L. (2000) Metaphoric structuring: understanding 2me through spa2al metaphors. Cogni<on,
75, 1-28.
• Boroditsky, L. (2001) Does Language Shape Thought?: Mandarin and English Speakers’ Concep2ons of
Time. Cogni<ve Psychology, 43, 1-22.
• Broughton, R. (1975) Biorhythmic varia2ons in consciousness and psychological func2ons. Canadian
Psychological Review/Psychologie canadienne, 16, 217.

60. References - 2
• Buehler, R. et al. (1994) Exploring the” planning fallacy”: Why people underes2mate their task comple2on
2mes. Journal of personality and social psychology, 67, 366-381.
• Buehler, R. et al. (2005) Collabora2ve planning and predic2on: Does group discussion affect op2mis2c
biases in 2me es2ma2on? Organiza<onal Behavior and Human Decision Processes, 97, 47-63.
• Carroll, I. (2016). No correla2on between es2mated size and actual 2me taken [online]. Available at:
<h_ps://iancarroll.com/2016/04/18/no-correla2on-between-es2mated-size-and-actual-2me-taken/>
[Accessed 4/18 2016].
• Casasanto, D. & Boroditsky, L. (2008) Time in the mind: Using space to think about 2me. Cogni<on, 106,
579-593.
• Danziger, S. et al. (2011) Extraneous factors in judicial decisions. Proc Natl Acad Sci U S A, 108, 6889-6892.
• Ehrlinger, J. & Dunning, D. (2003) How chronic self-views influence (and poten2ally mislead) es2mates of
performance. Journal of Personality and Social Psychology, 84, 5-17.
• Flyvbjerg, B. (2006) From Nobel prize to project management: gewng risks right. Project Management
Journal, 37, 5-15.
• Flyvbjerg, B. (2008) Curbing Op2mism Bias and Strategic Misrepresenta2on in Planning: Reference Class
Forecas2ng in Prac2ce. European Planning Studies, 16, 3-21.
• Gailliot, M.T. et al. (2007) Self-control relies on glucose as a limited energy source: willpower is more than
a metaphor. Journal of personality and social psychology, 92, 325-336.
• Hall, E.T. (1959) The silent language. New York: Doubleday.
• Hogarth, R.M. (1991) Judgement and Choice. New York: Wiley.

61. References - 3
• Hoijer, H. (1954) Language in culture: Conference on the interrela2ons of language and other aspects of
culture. Chicago: University of Chicago Press.
• Hyndman, r. & Athanasopoulos, G. (2013) Forecas2ng: principles and prac2ce. Melbourne: OTexts.
• Jones, L.R. & Euske, K.J. (1991) Strategic Misrepresenta2on in Budge2ng. Journal of Public Administra2on
Research and Theory, 1, 437-460.
• Kahneman, D. & Tversky, A. (1977) Intui2ve predic2on: Biases and correc2ve procedures.
• Kleitman, N. (1957) Sleep, wakefulness, and consciousness. Psychological Bulle2n, 54, 354-359.
• Kruger, J. & Dunning, D. (1999) Unskilled and Unaware of It: How Difficul2es in Recognizing One’s Own
Incompetence Lead to Inflated Self-Assessments. Journal of Personality and Social Psychology, 77,
1121-1134.
• Kruger, J. & Evans, M. (2004) If you don’t want to be late, enumerate: Unpacking reduces the planning
fallacy. Journal of Experimental Social Psychology, 40, 586-598.
• Kurtz, C. & Snowden, D. (2003) The new dynamics of strategy: Sense-making in a complex and complicated
world. IBM Systems Journal, 42, 462-483.
• Lewis, J.P. (2001) Large Limits to Soware Es2ma2on. ACM Soware Engineering Notes, 26, 54-59.
• Lous, E.F. & Palmer, J.C. (1974) Reconstruc2on of automobile destruc2on: An example of the interac2on
between language and memory. Journal of Verbal Learning and Verbal Behavior, 13, 585-589.
• Lovallo, D. & Kahneman, D. (2003) Delusions of Success. Harvard Business Review, 81, 56-63.

62. References - 4
• Mar2n, D.M. et al. (2009) Free testosterone levels, a_en2onal control, and processing speed performance
in aging men. Neuropsychology, 23, 158-167.
• Maguire, E.A. et al. (2000) Naviga2on-related structural change in the hippocampi of taxi drivers.
Proceedings of the Na<onal Academy of Sciences, 97, 4398-4403.
• Pelrine, J. (2000) Modelling infec2on scenarios - a fixed-price eXtreme Programming success story.
OOPSLA 2000, OOPSLA 2000 Companion, 23-24.
• Roy, M.M. & Christenfeld, N.J.S. (2007) Bias in memory predicts bias in es2ma2on of future task dura2on.
Memory & cogni2on, 35, 557-564.
• Schwartz, B. (2005) The Paradox of Choice: Why More Is Less. New York: Harper Perennial.
• Shaw, J. & Porter, S. (2015) Construc2ng Rich False Memories of Commiwng Crime. Psychological Science,
25, 291-301.
• Tice, D.M. et al. (2007) Restoring the self: Posi2ve affect helps improve self-regula2on following ego
deple2on. Journal of Experimental Social Psychology, 43, 379-384.
• Tyler, J.M. & Burns, K.C. (2008) Aer Deple2on: The Replenishment of the Self’s Regulatory Resources. Self
and Iden2ty, 7, 305-321.
• Vohs, K.D. et al. (2005) Decision fa2gue exhausts self-regulatory resources—But so does accommoda2ng
to unchosen alterna2ves. Manuscript submi_ed for publica2on,
• Weick, M. & Guinote, A. (2010) How long will it take? Power biases 2me predic2ons. Journal of
Experimental Social Psychology, 46, 595-604.