Why things go worse than expected.

How the dismal science applies to your life.
April 9 2003 10:42 AM

Great Expectations?

The war's going worse than expected. So what? Almost everything in life goes worse than expected.

Illustration by Mark Alan Stamaty

Is the war going less well than expected? I honestly don't know, but if so, what else is new? Pretty much everything in life goes less well than expected, especially wars. And economics explains why.

The reason there are wars in the first place is that one side or the other is overconfident. After all, if everyone agreed on the expected outcome, there would be no need to fight the war—we could just jump to the conclusion. My ex-colleague Paul Krugman used to argue that World War II was fought inefficiently. The British bombed the Germans and the Germans bombed the British; think how much airplane fuel they could have saved by agreeing that each side would bomb itself instead. Better yet, they could both have agreed to actas if they'd been bombed and forgone the actual bombing altogether.

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One reason that doesn't happen is that the two sides don't agree on how much damage they're likely to inflict on each other. In other words, somebody's overconfident. That's why the war gets fought—to find out who the "somebody" is. So, right off the top, each combatant has at least a 50/50 chance of an unpleasant surprise.

Overconfidence is likely to be an even bigger factor in a war of choice. That's because we choose to fight precisely when we're most confident of winning—and confidence itself is often a symptom of overconfidence. We could have picked on Iran or North Korea, but we chose Iraq instead. Why? It must be at least partly because we liked our odds in Iraq. But the times in life when you like your odds are exactly the times when you're most likely to be overestimating them.

When someone offers you a box of chocolates, which candy do you choose? You choose the one you think will be the very best. That leaves a lot of room for disappointment. When you sat down at your computer this afternoon, you had a choice of roughly 10 billion Web pages to look at, and this is the one you chose. You thought this was the best of 10 billion options; what are the odds that you were right? That's why I'm pretty confident this column isn't as good as you expected it to be.

The same holds true for everything else in life. You might be very good, on average, at estimating the quality of potential mates. But the rare one whose quality you've way overestimated is precisely the one you're most likely to marry. And you might be very good, on average, at predicting how wars will go. But the rare one you've been way overoptimistic about is the one you choose to fight. So, marriages and wars are fraught with disappointment.

That doesn't mean that marriages and wars of choice are doomed to fail; it just means they're doomed to be more difficult or more expensive than you thought they'd be. That seemingly "perfect" marriage partner is probably not as perfect as you think but still probably a whole lot closer to perfect than someone picked randomly off the street. If we thought Iraq would be a cakewalk, that probably means both that Iraq is easier than North Korea and that it isn't quite as easy as we thought.

If Lincoln had foreseen the cost of the Civil War, would he have chosen to fight or would he have allowed the South to walk away? We can't know, but we do know that that war was much longer and more painful than almost anyone expected. The Northerners fought because they believed they could win at an acceptable cost. They thought so for a variety of reasons, some good and some bad. They ultimately won because some of those reasons were good. The victory was more expensive than they bargained for because some of those reasons were bad.

Recently, we've fought wars of choice in Grenada and Panama and, yes, Iraq in 1991. We thought they'd all be easy, and all of them were. But were they easier or harder than policymakers thought they'd be? Probably harder, because the policymakers who chose those wars were the ones with the rosiest of expectations.

At the moment I write this, things seem to be going very well in Iraq. Of course they are; we wouldn't have picked this fight in the first place if we didn't have good reasons for expecting to win it. But that doesn't mean we're winning it as easilyas we expected. I remember predictions that everything would be over in a week. That's the lesson of economics: Most things turn out well, but few things turn out as well as you thought they would.

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