5 ms·

Also be aware of the selection bias when it comes to estimations. The companies A, B and C all put in estimates for a product based on similar premises. Compa

by rfergie 13y ago

Also be aware of the selection bias when it comes to estimations. The companies A, B and C all put in estimates for a product based on similar premises. Company C gets selected because their estimate is the lowest. This could be because company C is the best and can do the work quicker but it is also possible that company C has just made a low estimate pretty much by chance. Estimates that are wrong (lower than the actual cost) are more likely to be selected so it always looks like estimates are bad even if all the estimates submitted actually do cluster around the true value

jacques_chester 13y ago
I think you're mixing bids with estimates.
- InclinedPlane 13y ago
  Is there some Universe where developer time is not synonymous with cash money dollars?
  - jacques_chester 13y ago
    No, I mean, the process of inviting tenders or bids is distinct from estimating. Bidders will inevitably perform some sort of estimate, even if it's only a wild guess. But even the most rigorous internal estimation process may then be passed to management or sales staff who will use it only as a starting point for the bid. The estimate didn't change; instead it was an input into the bid. And in as the grandparent comment demonstrates, buyers often pick the lowest bidder.
- rfergie 13y ago
  Yes, I think you are right. But after reviewing my comment I think it is a point that is still worth keeping in mind. The same kind of thing could happen internally within a company or even subconsciously within a developers mind.
  - jacques_chester 13y ago
    Yes, absolutely. The problem is that business documents like a bid, an estimate, a goal, a plan and so on all share similar surface features. So it's easy to mix them up. The classic is "that estimate is too high. Change the estimate". Conceptually, an estimate is an immutable object. What you're really being asked for is a new estimate that is closer to a goal.
justincormack 13y ago
The Winner's Curse http://en.wikipedia.org/wiki/Winner's_curse http://en.wikipedia.org/wiki/Winner's_curse

by rfergie 13y ago

jacques_chester 13y ago

I think you're mixing bids with estimates.

InclinedPlane 13y ago
Is there some Universe where developer time is not synonymous with cash money dollars?
- jacques_chester 13y ago
  No, I mean, the process of inviting tenders or bids is distinct from estimating. Bidders will inevitably perform some sort of estimate, even if it's only a wild guess. But even the most rigorous internal estimation process may then be passed to management or sales staff who will use it only as a starting point for the bid. The estimate didn't change; instead it was an input into the bid. And in as the grandparent comment demonstrates, buyers often pick the lowest bidder.
rfergie 13y ago
Yes, I think you are right. But after reviewing my comment I think it is a point that is still worth keeping in mind. The same kind of thing could happen internally within a company or even subconsciously within a developers mind.
- jacques_chester 13y ago
  Yes, absolutely. The problem is that business documents like a bid, an estimate, a goal, a plan and so on all share similar surface features. So it's easy to mix them up. The classic is "that estimate is too high. Change the estimate". Conceptually, an estimate is an immutable object. What you're really being asked for is a new estimate that is closer to a goal.

justincormack 13y ago

The Winner's Curse http://en.wikipedia.org/wiki/Winner's_curse http://en.wikipedia.org/wiki/Winner's_curse