People frequently forecast the outcomes of competitive events. Some forecasts are about oneself (e.g., forecasting how one will perform in an athletic competition, school or job application, or professional contest), while many other forecasts are about others (e.g., predicting the outcome of another individual’s athletic competition, school or job application, or professional contest). In this research, we examine people’s forecasts about others’ competitive outcomes, illuminate a systematic bias in these forecasts, and document the source of this bias as well as its downstream consequences. Eight experiments with a total of 3,221 participants in a variety of competitive contexts demonstrate that when observers forecast the outcome that another individual will experience, observers systematically overestimate the probability that this individual will win. Importantly, this misprediction stems from a previously undocumented lay belief—the belief that other people generally achieve their intentions—which skews observers’ hypothesis testing. We find that this lay belief biases observers’ forecasts even in contexts in which the other person’s intent is unlikely to generate the person’s intended outcome, and even when observers are directly incentivized to formulate an accurate forecast.