Arithmetic and Exponential Thinking

“We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten.” (Bill Gates)

I hadn’t heard this line before, but based on anecdotal evidence, I think Gates is right to zeroth order, and it is a very smart comment. The question is why this happens.

I think the answer is that we are naturally wired for arithmetic, but exponential thinking is unnatural. We probably use some sort of linear prediction that first over-estimates and then under-estimates the underlying exponential process.

 - From a blog

I think "Nothing succeeds like success" is also an example of exponential process.