People forecast from the inside view, building an estimate from their own plan's details, which invites optimism and the planning fallacy. This skill replaces that with the outside view: find a reference class of similar past cases, take the base-rate distribution of how they actually turned out, and anchor the forecast on that, adjusting only cautiously for genuine specifics. The output is a reference-class estimate. The honest constraint: it requires real base-rate data; inventing a distribution is worse than admitting uncertainty.
When to Use
- Forecasting cost, time, or odds of success for something with comparable precedents.
- The inside-view estimate is likely optimistic.
- High-stakes commitments prone to the planning fallacy.
When NOT to Use
- Genuinely novel undertakings with no comparable reference class.
- When you have no real base-rate data and would have to invent it.
- When the specifics genuinely dominate and no class is comparable.
- When a point certainty is expected (this produces a distribution).
Instructions
When asked to forecast with the outside view, follow these steps:
- State what is being forecast (cost, duration, success odds) and the inside-view estimate if one exists.
- Define the reference class. Identify the set of genuinely comparable past cases, and say why they are comparable. Resist a class that is too narrow or too flattering.
- Get the base rates. State the distribution of outcomes for that class - typical and worst-case - with the data source. If real data is unavailable, say so explicitly and stop or downgrade to a clearly-flagged rough estimate; do not fabricate numbers.
- Anchor on the outside view. Set the estimate from the base-rate distribution, not the plan's details.
- Adjust conservatively. Only then adjust for genuine specifics, in small amounts, and resist sliding back to the optimistic inside view.
- Emit the reference-class estimate per
references/TEMPLATE.md.
Output Format
Use the template in references/TEMPLATE.md. The deliverable is the reference class, base rates, and the outside-anchored estimate as a range, not a single optimistic number.
Quality Checklist
Before finalizing, verify:
- The reference class is genuinely comparable, not narrow or flattering.
- Base rates come with a data source, or missing data is flagged (not invented).
- The estimate is anchored on the distribution, then adjusted only conservatively.
- The result is a range/distribution, not a point certainty.
- The inside-view estimate did not sneak back in as the answer.
- The output is the reference-class estimate artifact, not prose.
Evidence
Tier S. The planning fallacy is robustly demonstrated and the outside view measurably reduces forecast error (Kahneman & Lovallo 1993; Kahneman 2011). Bent Flyvbjerg's reference class forecasting for infrastructure documented systematic overruns and has been adopted by institutions (e.g. UK guidance) - real-world validation, not only lab results. The strong evidence is from human forecasting; the AI use transfers the method, with the firm constraint that base rates must be real, not invented. Full grading: evidence/dossier.md.
Examples
See references/EXAMPLE.md for a completed reference-class estimate.