Clinton, Obama, and the decoy effect!
Clinton recently suggested that if she wins the Democratic primaries, she would select Obama as her vice president. Was this a good move on her part? How should Obama have reacted to this?
The field of behavioral economics has shown a phenomenon called the asymmetric dominance effect (or the decoy effect). The basic idea is that when we are presented with two options that are rather different, we have a hard time making a choice between them. In such cases, if a third alternative that is similar to one option but clearly inferior to it is added to the mix it can change the choices we make. It sounds odd that adding an inferior option that no one would select would influence our choices, but it does.
For example, if you had to choose between a weekend in Rome with all expenses paid and a weekend in Paris with all expenses paid, the decision is difficult because the options are different in so many ways (food, culture, atmosphere). But what would happen if we added a decoy option? What if we added a weekend in Rome with almost all expenses paid? This would be the same as the other trip to Rome but without the espresso in the morning. The idea is that Rome without the espresso would make Rome with espresso look better in comparison to Rome without the espresso and also overall and relative to Paris. This is why adding Rome without the espresso can get a larger market share for Rome
In my mind, Clinton and Obama are in many ways like Paris and Rome. Some people might have strong preferences but they are different options with very different advantages and disadvantages.
When Clinton introduced the Clinton + Obama option, she in fact introduced a Rome + espresso option and by doing this I suspect that she did two things. She made the option of choosing Clinton + Obama look good not just in relation to the Clinton only option but overall and compared to the Obama only option. At the same time, I suspect that she also made the Clinton only option look inferior in comparison. Not only to the Clinton + Obama option but also relative to the Obama option.
Now what should Obama have done? If he had presented a counteroffer in which he announced that he would accept Clinton as his vice president, he would have affected the same structure around his own candidacy and as a result, would have muted the decoy effect on the Clinton side.
Alternatively, he could have strongly declared that he would never accept the vice presidency and eliminated the viability of the Clinton + Obama option altogether, leaving Clinton with only the negative effect of suggesting this joint ticket in the first place.
From this perspective, the worst option is for Obama is not react to Clinton’s offer and keep it viable in people’s minds.
Dan Ariely and Jeff Stibel
The Upside of Irrationality, explores some positive and some negative ways that irrationality plays out in our lives.
Dan and Jeff:
A relevant and provocative post clearly illuminated. Choice is a powerful thing, and though we don’t always (or often enough) know it, we have power over our choices. Trouble is, when the decoy gets tossed in, it’s like having to face a choice on steroids, and if you don’t know what you’re doing, you could hurt yourself (or worse) someone else.
Incredibly interesting post. Studying economics myself, but focusing my career more on the policy/political side, I’d be very curious as to if the campaigns utilize economists and conduct their campaigns in a sort of game-theory influenced way, or if they are entirely qualitative and reactionary influenced. It would be nice to see this employed in the campaign and see how the media affects the results as it seems the media is an ever-increasing player in the momentum, role, and decision-making processes of these three candidates.
Great post on decoys. Loved that chapter of the book. Obama, though, has already come out strongly on the idea of him being Clinton’s VP. His points:
1) I am the front runner.
2) A VP should be someone ready to become President should the President die. Than how can Clinton say I am not ready to be President; but I am ready to be VP.
YouTube of course: http://youtube.com/watch?v=CM7Rqwf6_aw
All very interesting, I agree. Geoff, I believe that campaigns are far from qualitative and reactionary. I’m sure they all employ economists as well as psychologists, and people from pleny of other professions. They use strategy and anticipate the reaction of the masses. Not just for politics, but the media in general is manipulating us every step of the way. I think Dan’s book and posts are intended to smarten us up about these things so that if we fall victim, it is by our own (irrational?) choice.
i´m interested in the campaign, it´s in part like chess.
I had my preferences in the past now eclipsed by a new enlightened kingdom of plus perfect taxes in justice and love, yes, I realy love she:
http://es.youtube.com/watch?v=7sei-eEjy4g&feature=related
In some instances, I think politics have their own internal logic. And, in fact, it appears that Obama not reacting has been the best response. This is because Clinton may have reinforced the perception (has it become a meme?) that she is calculating.
The possibility of a Clinton/Obama option is not as much analogous to Rome plus espresso as it is analogous to a trip with Saturday in Rome and Sunday in Paris. Somehow it seems like admitting that Paris has an appeal that Rome lacks–but the travel agent must get you to Rome.
Since we are on presidential politics–what explanations do folks have about the PIPA findings regarding news consumers and voters being misinformed?
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