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Monday, January 9, 2017

‘Heuristics’: Any role in the Recent US Presidential Elections!

The international press greeted the triumph of Trump at the Presidential elections with such adjectives as: ‘surprising’, ‘shocking’, etc. Press has also attempted to explain how it has at all happened. Amongst them, what Michael Lewis, the author of the book, The Undoing Project that has been recently released—which pays homage to the two Israeli psychologists, Danny Kahneman and the late Amos Tversky who, questioning the economic model which assumed that people are rational, traced the systemic flaws in human thinking and decision making and in the process laid the foundations of behavioural economics—said stands out as exceptional.

Let us first look at how people, including a voter makes decisions. Usually, a decision is made with the singular goal that its outcome makes one happy. It thus assumes a serious effort. A decision to elect the President by an American voter therefore involves three steps: one, there is a choice set—in the instant case: Clinton or Trump; two, the voter forms expectations about the future outcome following his choosing any one of them; three, these possible outcomes are then assessed of course, on an evaluative continuum reflecting one’s personal values and current goals.

Decisions that are thus taken based on the means available to a decision maker to achieve his goals are termed as good or rational decisions. To elaborate, a decision taken based on: one, the money, physical and psychological capacities and social relationships of the maker; two, based on the possible consequences of the choice; three, in the event of their uncertainty, evaluating them according to basic rules of probability; and four, the choice is adaptive within the constraints of these probabilities and the happiness associated with those outcomes of the choice, is said to be a rationale decision.

Now the moot question is: Do we make all our decisions on these lines? Perhaps not always! At least that is what psychologists and behavioural economists opine: instead of attempting to maximize expected utility, we often turn out to be irrational. Based on their research during 1970s and 1980s, Dany Kahneman and Amos Tversky, Israeli psychologists, revealed the tricks that our mind plays in processing the information meant for decision making quickly and demonstrated with mathematical rigor that emotional impact of gains and losses can colour the decision. As a result, decision making is often undertaken:
· one, as a habit—resorting to automatic ways, a kind of ‘associative thinking’retrieving stored memory;
·      two, as a conformation to what others have done or imitating the choices of people whom one admires and
·   three three, based on religious principles or cultural mandates, rather than thinking about the decision in a more controlled manner.
Thus, most of the times, they say, decision making turns irrational. 

The cognitive psychologists described these ‘mental short cuts’ as ‘heuristics’—a kind of cognitive equivalents of optical illusions. And the heuristics is found operating mostly in three ways:
·  one, ‘anchoring’—in our estimates of frequencies, probabilities and even the desirability of consequences, a seemingly trivial factor becomes ‘anchor’, say for instance, when someone is asked to estimate the product of 8x7x6x5x4x3x2x1 in five seconds, one tends to give a far higher number than those who are asked to multiply 1x2x3x4x5x6x7x8 in the same time span. Seeing the big numbers first, the first group gets skewed and hence offers higher figure, says Danny and Tversky;
·  two, ‘availability heuristic’, which means arriving at decisions based on memories—past experiences influencing current decision.
·  three, ‘representativeness’, which is nothing but the human tendency to stereotype—to judge a person according to a model in one’s mind. 

Now, against this backdrop, Michael Lewis— argues that the collapse of the US market and the subsequent bailout of the banks made Americans of all hues to believe that their system was rigged and he believes that this economic folly gave way to political folly, and the result is: “The marketplace for politicians just did the something as weird as the marketplace for securities did.…”

Elaborating his analogy, he says that Trump went on anchoring crazy numbers, for he knows that the voters’ negotiation happens around the crazy numbers. For instance, Trump’s proclamation to levy 35% duties on goods imported to encourage American companies to stay put in the US and thus increase employment opportunities locally caught the attention of every ‘marginalized’ white ‘college-uneducated’ voter—interestingly in the process they even missed to see the downside of the proposal: price of consumer goods skyrocketing—and simply pushed them towards electing Trump as President. 

Lewis says that Trump by constantly speaking about gruesome ISIS executions or murders committed by undocumented-immigrants provided the voters with more memorable information than dry facts and figures and thus leveraged on ‘availability-heuristics’. Lewis asserts: “People don’t want the right answers. They want a story. They don’t think in statistical terms.”

Lewis further avers that Trump has also benefitted from the inclination of voters to get carried away by “representativeness heuristic”—to ‘stereotype.’ As Danny Kahneman said that it is correct to assume that a very tall, thin athlete is more likely to play basketball better than American football, and when a selector attempts to select a player  there is a danger he/she being carried by this mental model rather than evaluating a player based on statistics relating to his past performance. This rule of thumb often lead us seriously astray. Arguing that Trump benefited from this human inclination to stereotype, Lewis further elaborates his point thus: a voter’s mind thinks that a President looks like “a tall guy, mainly a white guy, with robust physique.” So, what all this meant is: a voter tend to evaluate a candidates and picks that candidate who fits his mental description—in the instant case, Donald Trump.

In conclusion, Lewis says that Trump being a political communicator of far effectiveness won the voters by exploiting their faulty mechanisms of decision making. He says: “You are, in a weird way, in the world where you are trying to overwhelm impulses. It’s so hard to get rid of it. This is how people think” (FT10/11 Dec, 2016). 

Lewis’s argument may however sound over-generalization, but stands to reasoning. No surprise if all this raises a question: “Is Lewis ‘anchoring’ his book against the election results? Perhaps, not, for he is already a best-selling author, but one thing is true: businessmen are excellent at selling. And Trump is basically a businessman! 


Unknown said...

I am reacting immediately after reading the first few lines of the article.
Evidently you have the vision and analytical capability.
My problem lies in understanding and attaining the desired satisfaction modern art.
I fail to grasp the meaning conveyed in complex sentences.
I would have got your message better if it was in simple sentences.

karpuramanjari said...

Thanks Prasad garu… I agree, long sentences make reading irritating… … but as you know, writing simple sentences is highly demanding… and am afraid I am not equipped with that craft…nevertheless, I shall make an attempt to minimize this irritation…

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