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Pandora’s Box: A Cautionary Tale for Optimists and Pessimists
"The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails" —William A. Ward.
Occasionally, I’ve been known to see the glass half full, while more often I’ve seen it half empty. While I am not alone in this this type of dualistic thinking, I have learned that such a strong dichotomy of thought can reveal biases that may lead to problems. So when I find myself approaching situations with an overly negative or exceedingly positive perspective I like to think back to the story of Pandora’s Box.
Pandora, as you may recall, received a wedding gift from Zeus in the form of a beautiful box. Zeus wanted to test Pandora, so he cunningly packed the box full of terrible things and attached instructions that she never open it. Despite the warnings, Pandora’s curiosity got the better of her, and upon opening the box, terrible things were released into the world, causing great suffering to mankind—like disease, old age, despair, death, hatred, and pessimism.
Seeing the terrible things she had released, Pandora slammed the lid shut, trapping Zeus’ final “gift” at the bottom of the box. Poor Pandora thought that nothing inside the box could be worse than the horrors that had already been released, so she opened the lid once more and released the final gift: hope.
If you believe the story, then we can blame Pandora (and wily Zeus) for gifting humans gloomy outlooks and filling our heads with cheery delusions, but the true meaning is much deeper than that. Initially, Pandora was overly positive or optimistic in her decision to open the box, but it was her pessimistic outlook that guided her to open it the second time, believing things couldn’t get any worse. In the end; however, it was Zeus who had the most realistic approach by adding the gift of hope to the box in order to balance the rest of the terror released to the world—a balance between optimism and pessimism.
When making decisions about maintaining our buildings, which outlook can you relate to, and which will yield the best outcome?
Let’s unpack the box…
The pessimist believes that everything negative is sitting at the doorstep as an imminent and unavoidable threat.
For example: “This venture will never make any money” (business) or “Our roof is going to fall on our heads” (asset management) or “I’m going to get cancer” (everyday life).
The figure below shows the effect a pessimistic outlook might have on the forecasting of capital costs associated with a building.
Pessimism is characterized by a systematic tendency towards:
- Expecting unrealistically low benefits from a course of action
- Underestimating the likelihood of positive events
- Overestimating the likelihood of undesirable outcomes
- An expectation that the worst-case scenario will be realized
With its gloomy outlook, pessimism presents an overly cynical view of circumstances and can cause unnecessary anxiety.
But pessimism can provide a protective measure and have a few positive attributes, such as ensuring that we err on the side of caution or practice a strategy of look before we leap.
In summary, the pessimist might be considered to represent risk management from the sky is falling perspective.
The optimist believes that only positive things are going to happen and that all negatives will be avoidable.
For example: “We are going to make buckets of money in this venture” (business) or “Our roof will never leak” (asset Management) or “I won’t get sick” (everyday life).
The figure below illustrates how an optimistic outlook of the future may postpone the need to pay for capital costs associated with a building (such as roof replacement).
Optimism is a systematic tendency towards:
- Overestimating the likelihood of positive events.
- Underestimating the likelihood of undesirable outcomes.
- The irrational expectation that the best-case scenario will be realized.
- Expecting unrealistically high benefits from a course of action.
Human judgment is generally optimistic and that is what motivates us to try new things.
But here are some cautions: it may be a little naive to always approach situations with optimism; self-deception can lead us to ignore negative consequences; and overconfidence can be dangerous.
In summary, the optimist might subscribe to risk management from the head in the sand perspective.
The realist believes that balance is required in the successful conduct of human affairs. It is much harder to be a realist than it is to be an optimist or a pessimist.
For example: “If we plan carefully and are mindful, our venture can make money” (business) or “Our roof will eventually leak, but we have a maintenance contract in place” (asset management) or “I’ll do my best to eat healthy, exercise and enjoy life, and who knows what the future holds” (everyday life).
Realism is the practice of accepting a situation as it is and being prepared to deal with it accordingly.
The figure below illustrates a realistic forecast of the future, where the capital costs associated with a building are distributed in multiple “lumps” at different times over the planning horizon. There is no single large lump (like the pessimist) or lack of any lumps (like the optimist).
So what does this all mean?
Like the other nasty surprises stuffed into Pandora’s box, optimism and pessimism can be harmful. To protect ourselves and our assets, realism provides a necessary reality check.
Human beings bring many biases when dealing with uncertainty or preferences. What makes life so interesting and challenging is that we must always search for a balance.
Perhaps this is the lesson that Zeus was trying to teach Pandora after all.
David is a certified professional reserve analyst, and a specialist in building maintenance and planning.