Heuristics and Biases in Project Management


By Lev Virine, Ph.D., P.Eng.; Michael Trumper; Eugenia Virine, PMP

Intaver Institute Inc.

Calgary, Alberta, Canada


As we go about our lives, whenever we make decisions, whether they are relatively important, “what strategies or tactics should we use to reduce project cost?”, or relatively trivial, “is No-Name peanut butter really a better bargain than the brand-name version?”, we are forced to assess probabilities or essentially make bets, which is not an easy task. We often apply rules of thumb or heuristics when we make judgments about probabilities of future events. In many cases, using these rules will help us make good decisions. However, depending upon the situation, this type of decision making can lead to faulty judgments or biases. In this paper we will focus on a few common heuristics and biases which affect project management: availability, anchoring, representativeness, and others.

How Project Managers Became “Gamblers”

There is a problem that pervades our society: we have all become pathological gamblers. We are not referring to those of us who spend all of our spare time in casinos in the vague hope that they will win their retirement nest egg – the opposite outcome is almost nearly always the case. Rather, we are referring to how we must gamble during the course of our everyday lives. If you drive or are a passenger in a car, there is a probability that you will be involved in an accident.  Take your clothes to the dry cleaner and there is probability that your shirt will be damaged; you buy chicken in the supermarket and there is a probability you would get salmonella or some other unpleasant condition. In fact, there are whole industries whose revenue and profits dwarfs those of the Las Vegas casinos that are all based on gambling: investments and insurance. When we invest our money, what we are actually doing is gambling that certain stocks or mutual funds will provide us with a certain returns. And unless we are willing to watch the value of our savings evaporate over time due to inflation, we are left with few options but to place a bets using one or multiple financial instruments. In our society, this type of gambling is both a respectable profession and a source of great personal wealth. Professional gamblers earn much higher amount of money than people who actually produce the goods. 15 of the 120 richest people in the world made their fortune in investment, finance, gaming, or leveraged buyouts –  industries whose are based on gambling (Forbes 2017).

Perhaps, what is most interesting is that this type of gambling has in some specific cases become mandatory; you must bet on something or face possible legal consequences. The most common example is car insurance which you must have before you can drive on public roads. As this is the case and we don’t have any other but to gamble, let’s learn how to improve our gambling skills. In this paper we will learn about common mistakes which all people, including project managers, make when people make their choices under uncertainties.

Availability Heuristic

Let‘s imagine that you are an IT project manager and tasked with selecting new laptop computers for your organization. You reviewed all the product sheets for Dell, Toshiba, HP, and other laptop brands: performance, price, reliability, memory, etc. After a detailed analysis, you decided that Toshiba is a best brand for your organization. However, the day before you are planning to issue your recommendation, you met a friend in a local pub. After you mention your plans to recommend Toshiba, he gave you a funny look and then said: “Don’t do it, I bought a Toshiba and after only three months the hard drive failed and I lost all of my data. This is a terrible computer”. You become slightly flummoxed and you start to rethink your proposed recommendation of Toshiba laptops, perhaps Dell might be the better choice.  Here is the problem. You did your analysis using comprehensive information about each laptops; however, after a chance meeting at the pub, you are now thinking of ignoring the results of your analysis because now your assessment of the reliability of certain brands of computers is skewed (Schwartz 2005). In reality, your friend describes only one single case with a particular Toshiba computer and does not reflect any statistical data about the quality and reliability of said laptop.

Here are some other common examples:

  • When avid smokers are asked why they do not try to get rid of their habit despite overwhelming evidence that smoking is harmful, they may answer that they aren’t worried because they know someone who smoked all of their life and lived until a ripe old age 95 years when they were unfortunately run over by a bus.
  • You decide to take a vacation in Mexico and during your research to find the perfect vacation locale,  you discover that Mexico has beautiful beaches, world class hotels, and good security in the tourist areas. However, just as you were in the process of selecting your Mexican vacation destination, you see headline in the news that US tourist had been robbed in Acapulco. You become extremely worried and think about cancelling your vacation.
  • You are planning to start developing a database application to need to select a platform. You know only four companies that develop software applications similar to the one you are planning to develop. Three of them are using Oracle and only one is using Microsoft SQL Server, so you decide on using the Oracle platform.

What is the common theme in all of these examples? In all of these situations you are making a bet. If you smoke, you are betting that you will be one of the luck few whose lifespan will not be shortened by the habit. If you purchase a computer, you are betting that it will be reliable. Unfortunately, most people don’t perform this type of detailed analysis for most real life issues in which the extra effort would be very beneficial. One of the main reasons we don’t is because it takes a lot of mental effort and energy.  In addition, our ability to perform a truly rational analysis is limited because:

  1. a) the information we have may be limited,
  2. b) our minds have basic cognitive limitations, and
  3. c) there is only a finite amount of time that we have to make decisions.

Therefore instead of using detailed analysis, we rely on simplified mental strategies or “rules of thumb” to guide our decisions. In the psychology of judgment and decision making these rules of thumb are called heuristics. In many cases, heuristics lead to good decisions; however, they often cause inconsistencies and predictable biases.

The behaviors we describe for car buying and smoking are examples of one such heuristic: availability (Tversky and Kahneman, 1973). According to this heuristic, people make judgments about the probability of certain events based on how easily the event is brought to their mind. When people bet or take other risks, they have to determine the probability of some type of event occurring. And they often do it incorrectly:


To read entire paper, click here


About the Authors

Lev Virine, PhD

Intaver Institute
Alberta, Canada


Lev D. Virine
, Ph.D. has more than 25 years of experience as a structural engineer, software developer, and project manager. He has been involved in major projects performed by Fortune 500 companies and government agencies to establish effective decision analysis and risk management processes as well as to conduct risk analyses of complex projects. Lev’s current research interests include the application of decision analysis and risk management to project management. He writes and speaks around the world on the decision analysis process, the psychology of judgment and decision-making and risk management. Lev can be contacted at [email protected]

To view other works by Lev Virine, visit his author showcase in the PM World Library at http://pmworldlibrary.net/authors/lev-virine-phd/ 


Michael Trumper

Intaver Institute
Alberta, Canada


Michael Trumper
has over 20 years’ experience in communications, software design, and project risk and management. Michael is a partner at Intaver Institute Inc., a vendor of project risk management and analysis software. Michael has authored papers on quantitative methods in project estimation and risk analysis. He is a co-author of two books on project risk management and decision analysis. He has developed and delivered project risk analysis and management solutions to clients that include NASA, DOE, and Lockheed Martin.

To view other works by Michael Trumper, visit his author showcase in the PM World Library at http://pmworldlibrary.net/authors/michael-trumper/


Eugenia Virine, PMP

Alberta, Canada


Eugenia Virine
, PMP, is a senior manager for revenue development at Greyhound Canada. Over the past 12 years Eugenia has managed many complex projects in the areas of transportation and information technology. Her current research interests include project risk and decision analysis, project performance management, and project metrics. Eugenia holds B. Comm. degree from University of Calgary.

To view other works by Eugenia Virine, visit her author showcase in the PM World Library at http://pmworldlibrary.net/authors/eugenia-virine-pmp/