Example APPPM 2020

Collention of tools

Bent Flyvbjerg: ”Curbing Optimism Bias and Strategic Misrepresentation in Planning: Reference Class Forecasting in Practice”

An exposition of the concepts of Optimism Bias and how to act to the potential consequences. Strategic Misrepresentation is in this article linked to cost overruns. Finally, Reference Class Forecasting is represented as a solution to the two forms of bias.

Daniel Kahnemann: 'Thinking fast and slow'

Kahnemann focuses on how cognitive biases, especially optimism bias, can affect the decision-making process. The book focuses on human behavior and is based on recent years of research. Throughout the book, Kahnemann set up real-life examples from for example the court and the judges as the decision-makers. Liu, L., Wehbe, G., & Sisovic, J. (2010). The accuracy of hybrid estimating approaches? Case study of an Australian state road & traffic authority. Paper presented at PMI® Research Conference: Defining the Future of Project Management, Washington, DC. Newtown Square, PA: Project Management Institute.

The article represents a new possible solution with the use of a hybrid approach. The hybrid will consist of parts from Reference Class Forecasting (RCF) and the conventional fixed contingency approach. The study was used to understand alternatives to RCF.

Clifford Gray: 'Revisit of Reference Class Forecasting (RCF): Estimating Costs of Infrastructure Projects'

The article represents the key managerial actions supporting the use of Reference Class Forecasting. C. Gray provides suggestions on how to implement Reference Class Forecasting.

Dan Benţa, Lucia Rusu, and Marius Podean: 'Successful Implemented Theories For Reference Class Forecasting in Industrial Field'

General issues regarding risk management are represented. Benta illustrates different theories regarding the Reference Class Forecasting e.g. “three-step approach”

Hans Reichenbach: “The theory of probability”

Reichenbach introduces the use of the theory behind probability. He explains the concepts of probability with the use of examples of calculations. Furthermore, the limitations of the theory of probability are presented.

The British Department for Transport, “Procedures for Dealing with Optimism Bias in Transport - Planning Guidance Document”

The paper investigates the potential of using a guide in future infrastructure projects. The theories leading to this idea are provided. Instructions are specific and explained for a specific reference project within the area of infrastructure. The use of the uplift method is explained, and real-world examples are given on how to use those uplifts to minimize the risk of optimism bias.

John Venn: “The logic of chance”

Fundamental problems regarding the use of probability are introduced. John Venn is skeptical about the concept of frequentism applied to the real-world problem. If applying the "three-step approach" to Reference Class Forecasting, it will be based on this type of probabilistic. John Venn’s book provides the basics of the limitations that should be considered when using Reference Class Forecasting.

Bent Flyvbjerg: “Policy and planning for large infrastructure projects: problems, causes, and cures”

In this paper, Bent Flyvbjerg identifies false estimations in infrastructure projects as well as the concepts behind it. Disadvantages will, according to Flyvbjerg, occur to these projects. The explanation for the problems is followed up by providing insights to possible solutions for the false estimations.

Alan Hájek: “The Reference Class Problem is Your Problem Too”

With the use of a philosophical and mathematical perspective Hájek represents probabilistic and the inter-related assumptions. He presents problems of Reference Class Forecasting from various perspectives. Furthermore, the effects of these problems and their outcome of a probability calculation are given.