This effect was identified within the larger idea of prospect theory by Daniel Kahneman and Amos Tversky. Their groundbreaking work in behavioral economics, especially in the late 1970s and 1980s, challenged traditional notions of rational decision-making. The Pseudocertainty Effect specifically addresses how perceived certainty in one stage of a decision-making process can lead to a distorted assessment of risk in later stages.

In the early stages of a project, if things go smoothly, there’s a risk that the team might develop a false sense of security about the project’s overall complexity. This can lead to underestimating the time, resources, or effort that might be required for subsequent phases. For example, a team might breeze through the discovery and design phase and assume that the implementation will be just as straightforward, not accounting for potential technical challenges or integration issues.

This principle can also play a role in team morale and turnover. Overconfidence in the early stages of a project can set unrealistic expectations, which might lead to increased pressure and potential burnout as the team struggles to meet these expectations later. When the reality of the complexity sets in, it can lead to a drop in team morale or people leaving, especially if the team feels unprepared or unsupported.