An Inside View on a topic involves making predictions based on your understanding of the details of the process. An Outside View involves ignoring these details and using an estimate based on a class of roughly similar previous cases (alternatively, this is called reference class forecasting), though it has been pointed out that the possible meaning has expanded beyond that.

For example, someone working on a project may estimate that they can reasonably get 20% of it done per day, so they will get it done in five days (inside view). Or they might consider that all of their previous projects were completed just before the deadline, so since the deadline for this project is in 30 days, that's when it will get done (outside view).

The terms were originally developed by Daniel Kahneman and Amos Tversky. An early use is in Timid Choices and Bold Forecasts: A Cognitive Perspective on Risk Taking (Kahneman & Lovallo, 1993) and the terms were popularised in Thinking, Fast and Slow (Kahneman, 2011; relevant excerpt). The planning example is discussed in The Planning Fallacy.

Examples of outside view

1. From Beware the Inside View, by Robin Hanson:

I did 1500 piece jigsaw puzzle of fireworks, my first jigsaw in at least ten years. Several times I had the strong impression that I had carefully eliminated every possible place a piece could go, or every possible piece that could go in a place. I was very tempted to conclude that many pieces were missing, or that the box had extra pieces from another puzzle. This wasn’t impossible – the puzzle was an open box a relative had done before. And the alternative seemed humiliating.

But I allowed a very different part of my mind, using different considerations, to overrule this judgment; so many extra or missing pieces seemed unlikely. And in the end there was only one missing and no extra pieces. I recall a similar experience when I was learning to program. I would carefully check my program and find no errors, and then when my program wouldn’t run I was tempted to suspect compiler or hardware errors. Of course the problem was almost always my fault.

2. Japanese students expected to finish their essays an average of 10 days before deadline. The average completion time was actually 1 day before deadline. When asked when they'd completed similar, previous tasks, the ...