Estimation Errors

Is there any theory that talks to human optimism or pessimism when making estimates in the context of contracts. I have worked with project managers who when estimating effort & duration look to counter the uplift applied by people who think they’re going to have to do what they’re estimating and will be treated more harshly for being late than early. There’s some type I & type II error stuff here. I think it also applies to risk probability estimation, the cost of not reserving and the reputation damage to the assessor (of under estimating) may both lead to an over-estimate being made.

Surowiecki, in wisdom of crowds states that the betting exchanges (and books) are accurate estimators more so than opinion polls because people have measurable stake in the decision.

Has anyone written about this?

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