Besides all popular explanations of "failure to plan" (based on various cognitive biases and reasoning errors), there could be also another effect in play. Eve

Besides all popular explanations of "failure to plan" (based on various cognitive biases and reasoning errors), there could be also another effect in play. Even for somebody who could produce a perfect estimate, sometimes it can be more strategical to present more "optimistic" estimate to others. Deliberate underestimation can be used to get approval for a project which otherwise wouldn't get through (if a more realistic but much larger estimation would be given). This can be a way how to get sunk cost fallacy [1] work for you. "It's easier to ask for forgiveness than it is to get permission". If we look at those example "estimation failure" projects, it did actually work for them in the end. They were not canceled, additionally money was poured into them. Maybe if the initial estimate was a correct $102M (instead of massively underestimated $7M), Sydney wouldn't have its landmark at all. Actually, such strategical underestimation can work as a motivational tool even for a single actor (with no external parties involved). What can be daunting under realistic assessment, could become more palatable when taken in smaller chunks. [1] http://en.wikipedia.org/wiki/Sunk_costs http://en.wikipedia.org/wiki/Sunk_costs