---
title: More on expectations higher than expected
date: "2002-10-03T12:00:00Z"
categories:
  - links
wp_id: 1117
description: I explore the law of iterated expectation after a friend corrected my interpretation of a confusing financial headline. It clarifies that a higher than expected expectation is essentially just a revised, higher forecast.
keywords: [law of iterated expectation, economic times, financial journalism, forecasting, probability]
---

After reading my post on the ET article mentioning "[expected to see a higher than expected rise](http://economictimes.indiatimes.com/cms.dll/articleshow?artid=23700601)", a certain [CA gold-medallist friend](http://www.geocities.com/prachi_deuskar/) of mine wrote back this obscure note that I refuse to understand:

> ... if you take it literally it is not possible. To put it more technically, something called a **law of iterated expectation** comes to play. Today's expectation of tomorrow's expectation about what will happen day after is just today's expectation of what will happen day after.
>
> I think what they mean by "..." is that the revised expectation is higher than the earlier expectation.

She is in the habit of being right, so I had better accede.