Why construction projects always go over budget
I&#x27;m curious about the higher level issues at play as well, which I&#x27;m just guessing about since I only have a lay understanding of the field<p>Seems like there&#x27;s probably a &quot;winners curse&quot; variant: conditioned on a bid being accepted, it is likely to be underestimated even if unconditioned there&#x27;s an equal probability of under and over resonating<p>Also seems like there&#x27;s an incentive alignment problem as well: there&#x27;s a clear benefit to bidding lower, and if the costs of underestimating are not born by the bidder then you would expect to see systematic underbidding even if we have on-average-accurate ways of estimating.<p>These feel like important issues that are orthogonal to our ability to estimate things accurately and I wonder how much of the effect is from which type of cause (I wish the author had talked about this)