Chapter 1 presents a conceptual framework to examine the ways in which the interaction of “animal spirits” – confidence, fear and a propensity to gamble – produced a tendency for decision-makers to gamble that massive battles would produce “victories” that could win the war. The puzzle of why both sides continued to resort to risky military strategies is explained by a combination of overconfidence on the part of generals that their military strategy would succeed, and a deep-seated fear if they did not continue to press their attacks they might lose the war. The result was a series of military disasters that led to a war of attrition which gradually exhausted the belligerents without producing any hope of ending the war. Ultimately, I argue that the outcome of the war rested as much on the ability of the Allied Powers to muster their superior economic resources to continue the fight, as it did by the success of military strategies on the battlefield.