Uniqueness Bias: Why It Matters, How to Curb It

TL;DR

This paper investigates the impact of uniqueness bias on project performance, demonstrating that perceiving projects as unique often leads to underperformance, and suggests strategies to mitigate this bias.

Contribution

It introduces the concept of uniqueness bias, links it to forecasting errors in project management, and proposes practical methods to reduce its effects.

Findings

Perceived uniqueness correlates with project underperformance.

Mitigation strategies include reference class forecasting and premortems.

Uniqueness bias significantly affects decision accuracy.

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.