“How will we react when history presents us with uncertainty and risk? A sign on a Stalin bust in Prague in 1989 reads ‘Nothing Lasts Forever.'” Source of caption and photo: online version of the WSJ article quoted and cited below.
(p. B1) The psychologist Daniel Kahneman writes that humans naturally “tend to exaggerate our ability to forecast the future, which fosters optimistic overconfidence,” something he terms the “planning fallacy.”
“In terms of its consequences for decisions, the optimistic bias may well be the most significant of the cognitive biases,” he notes. “When forecasting the outcomes of risky projects, executives too easily fall victim to the planning fallacy.”
For the full commentary, see:
JOHN BUSSEY. “THE BUSINESS; The Euro Crisis in Ourselves.” The Wall Street Journal (Fri., June 1, 2012): A13.