Prospect Theory and its Relationship to Negative Campaigns

I wonder if Prospect Theory could shed some light on why negative campaigning exists and continues, even though people express distaste for it. People call some forms of negative campaigning the politics of distraction, which brings to mind Obama’s statement,

“No, what’s troubling is the gap between the magnitude of our challenges and the smallness of our politics — the ease with which we are distracted by the petty and trivial, our chronic avoidance of tough decisions, our seeming inability to build a working consensus to tackle any big problem.” Barack Obama, The Audacity of Hope, p. 22.

In an earlier posting,  I reflected on why the greater salience of negative over positive might incline campaigners to spend more ink, airtime, and robocalls on negative than positive messages.

But I think it goes beyond that.

Prospect Theory was introduced by Danny Kahneman and Amos Tversky to explain observed behavior in contrast to the ‘rational behavior’ predicted by Expected Utility Theory. Here are some paragraphs from a short essay I wrote when we were studying Prospect Theory under Dr. Barry Schwartz.  The figure was one taken from course notes:

Prospect theory models the relationship between objective changes associated with decisions and the associated subjective responses that people either anticipate or experience for the decision. This theory explains why people experience more or less satisfaction than objective reality can explain.

The prospect theory model can be visualized as graph with the zero point representing the person’s baseline state before the decision, the horizontal axis representing the objective change, and the vertical axis representing anticipated or experienced subjective response. The model is not a diagonal line through the zero point, as would be expected if the magnitude of objective changes directly determined variations in subjective experience.

Sketch of Prospect Theory

Sketch of Prospect Theory

For changes in the positive direction, the relationship is represented as a curve that rises and then tapers off, reflecting diminishing marginal utility. That means that the amount of experienced benefit does not keep up with increasing positive objective change. For example, a person who gains $100 dollars will experience considerably less than twice the satisfaction if he were to gain an additional $100.

For changes in the negative direction, the relationship is represented as a curve that drops and then tapers off, showing a pattern of decreasing marginal disutility similar to the positive curve. However, it drops further and more steeply than positive curve rises. The model thus indicates that a loss of a certain objective amount hurts more than a gain of the same amount pleases.

So how does this relate to the election? Is it just another way of saying the negative is more salient than the positive?  I think it brings along the idea of the intuitive nature of decision-making when there are many many different pieces of information to incorporate.  Kahneman (2003) writes about two cognitive systems — on the one hand, the reasoning system that is slow, serial, controlled, rule-governed, effortful, flexible and emotion-neutral;  on the other hand, the intuition system that is fast, parallel, automatic, effortless, associative, slow-learning, and emotional.  We can get pretty frustrated if we think that political thinking is rule-governed and emotion-neutral.   Or even if we think it should be and find it isn’t.  Kahneman cites Klein (2003, chapter 4) as arguing that skilled decision makers often do better when they trust their intuitions than when they engage in detailed analysis.  So how skilled are we at making important political decisions?

References

Kahneman, D. (2003).  A perspective on judgment and choice:  Mapping bounded rationality.  American Psychologist, 58, 697-720.

Kahneman, D. & Tversky, A. (1979). Prospect theory: A analysis of decisions under risk. Econometrica, 47, 263-291.

Klein, G. (2003). Intuition at work: Why developing your gut instincts will make you better at what you do. New York:  Doubleday.

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2 Comments

Filed under Decision making, Uncategorized

2 responses to “Prospect Theory and its Relationship to Negative Campaigns

  1. Jo

    Great post. For the first time, I understand what prospect theory says.

    I wonder though about your conclusion about intuition.

    Generally we are shocking at making predictions about complex phenomena, including the model above. We do better when a straight line simple model is relevant.

    Intuition is important to me. Before I was even acquainted with Myers Briggs I realized that it underlied my talent for maths and practical sociology/organizing.

    None the less, I also learned early, and again before I was acquainted with Myers-Briggs, that it lends itself to asking good questions not delivering good answers. A good question can lead to complex, detailed and objective analysis that is best supported with stats, excel spreadsheets, debate, etc..

    There may also be a significant difference between forward-tasks of tracking or action and backward, diagnosis or sherlock tasks; and of course persuasive or celebratory or inspirational tasks. Positive psychologists seem to have stuck to diagnostic thinking in the main.

    I am most interested where you will take this.

  2. Kathryn

    Jo,

    Well, I wasn’t sure where I was going in the last paragraph when I brought up intuition, except the acknowledgment that there’s a lot of gut feeling and emotion in political decisions and people don’t make political decisions in a purely rational way not because they are flawed but because that’s they way people are. There are so many, many questions involved that some intuitive processing is inevitable, but intuitive processes are vulnerable to framing distortions. There’s more scope for manipulation in the negative direction.

    I’m not sure I understand your distinction between forward tasks and backward tasks, and how you come to the conclusion that positive psychologists have stuck to backward thinking. There are a lot of researchers interested in positive psychology, and they have different approaches and points of view. I can’t see your generalization, but then it comes without the stats, excel spreadsheets, and debate that go into a complex detailed and objective analysis :-}

    I’m reminded of Jon Haidt’s argument, that people mostly make intuitive decisions and then employ the rational mind to justify them. “Our minds are loose confederations of parts, but we identify with and pay too much attention to one part: conscious verbal thinking.” (Haidt, The Happiness Hypothesis, 2006, p. 22). He then goes on to develop the idea of the rider and the elephant, both parts of one mind, both with strengths and special skills. Hmmm. I need to reread this book, since the last sentence in chapter 1 is “But first we have to figure out why the elephant is such a pessimist.”

    Kathryn

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