2. Why do people (citizens & policy
makers) make “bad” decisions?
Why did things go so wrong in the wars
in Vietnam & Iraq?
How do people make decisions?
Two competing decision-making
theories:
Political economists worship Anthony
Downs
Political psychologists worship Herbert
Simon & Daniel Kahneman
3. 1. 1-to get out of bed; rest is sleep-walking
2. 10-20
3. 50-100
4. 100’s
5. 1000’s
5. We’re aware of only a small fraction of the 1,000s of
choices we make each day
We think we make only 15 food choices each day when
we actually make 100s (At the table or in the chair? All
or save half?)
Bad decisions can have important consequences
Medical decision errors (misdiagnoses) by trained
professionals are the 6th most common cause of death
in the U.S., behind breast cancer, suicide & homicide.
Judges, juries make life and death decisions
War and peace, genocide, sexual harassment,
discrimination and altruistic actions are all decisions
with huge consequences
Clearly, we need to study how we make decisions!
6. Judgments: perceiving objects or events as
good or bad or likely to occur.
Decisions: commitment to an option or a
course of action selected from a set of
options.
7. ANTHONY DOWNS
Economist, Senior Fellow at the
Brookings Institution in
Washington D.C.
Famous for: Writing the first application
of economic rational choice theory to
elections (his dissertation).
HERBERT SIMON
1916-2001, Nobel prize, Economics
Carnegie Mellon: Cognitive
Psychology, Computer science &
Political Science
Famous for: Bounded rationality, actual
decision making.
Simon was among the founding fathers of artificial intelligence,
information processing, decision-making, problem-solving and
more.
8. Anthony Downs vs. Herbert Simon (& Daniel Kahneman)!
The secret ingredient?
The American voter:
10. Definition of Rationality:
Rational behavior is purposive behavior directed toward
the attainment of goals.
To be rational, one selects the alternative course of action
(means) that most efficiently reaches one’s goal (ends).
Rationality is assessed more by how people choose
between alternative actions (means) than by what their
goals are. However, Downs considers only political &
economic goals.
▪ In economics, people value money so the option that yields the
most money is taken.
Requires a very high estimation of the average
individual's capacity for reason, choice, cognition,
and conscious calculations.
11. People make a decision by determining the likelihood that
each option’s outcome will occur and the value of the
outcome in question. Then they multiply the likelihood and
value for each option, which equals its expected value, and
whichever option has the highest score is the option people
should choose because it brings them the most utility or
expected value.
Option 1: End the game now & keep the $32,000.
Expected value = outcome X likelihood ($32,000 * 1.0) = $32,000.
Option 2: Play another round where you must answer
correctly a multiple choice question with 4 possible answers
to receive $64,000.
Expected value of answering the additional question = outcome X
likelihood of getting it right ($64,000 * 0.25) = $16K
+ outcome X likelihood of getting it wrong ($32,000 * 0.75) = $24K
$40,000.
▪ $16K + $24K = $40,000.
Decide to play another round!
12. Alternative A
(End Game)
1.0
0.25
0.75
Alternative B
Another Round
$32,000
$64,000
$32,000
EVA = 1.00*($32,000 ) = $32,000
EVB = 0.25*($64,000) +
0.75*($32,000)
= $16,000 + $24,000 = $40,000
•Decision nodes – squares = choice points
•Chance nodes – circles = intervening uncertain events between choices and outcomes
•Probabilities – the likelihood that an outcome will occur
•Expected benefit – payoffs – the consequences of a given combination of choices and chances
This decision is a no-brainer but it still involves difficult calculations!
13.
14. Deductive theories: the analyst makes
simplifying, "as if" assumptions about how the
world works and then deduces an actor's
behavior in a given situation.
Theories are tested by the accuracy of their
predictions rather than the validity of their
assumptions.
The end of science is prediction, rather than
explanation.
Preference for producing "elegant models of
irrelevant universes" vs. "data dredging," inductive
methods. Parsimony vs. complexity.
15. Citizens vote if PB > C, (expected benefits outweigh the
costs), where:
B = the extent to which the individual feels that one party
(candidate) will benefit him or her more than the other
party (i.e., "expected party differential").
C = costs associated with voting.
P = probability that a citizen's vote will affect the outcome
of the election.
▪ The probability that any national election will be decided by a single
vote is effectively 0. Close votes that come down to 200 votes will
be decided in a recount or in the courts.
Therefore, according to Downs, deciding not to vote is
perfectly rational. (“Rational abstention”)
If there is a positive benefit of voting it’s psychological, not
rational.
Rational ignorance: cost of becoming informed >
benefits because we can’t affect the outcome of
political issues. It’s rational to be politically ignorant!
16.
17. Adopting Downs’ purely instrumental model
or its variants, either everyone or no one
votes!
"The Paradox that Ate Rational Choice
Theory”
18. What are the goals/means of candidates and
of voters?
Spatial theory
What are the predictions of the model?
Rational candidates can create irrational voters
(who rely on Party ID or candidate personalities
instead of issues) because:
▪ Candidates often won’t tell voters where they stand on
the most important issues.
▪ Candidates often converge on important issues and so
don’t offer voters a choice.
20. Issue voting usually ranks dead last as a
determinant of the vote choice.
Rational choice models provide poor
explanations (and predictions) of actual
voting behavior.
21. Voting is an expressive vs. an instrumental act,
with an intrinsic value of expressing one’s
preferences.
Throw out the P term because people aren’t good at
probability calculations. B includes psychological
gratification.
Example of Iraqi or Miami voters waiting in lines for hours.
Voting is very different from economic
consumption:
Voting is a collective action, and the Voter isn’t
guaranteed anything from voting. She doesn’t necessarily
get the candidate she wants.
An election is a public good that is made available to
everyone, regardless of whether or how they voted.
In contrast to the market, instrumental decision-making
is less relevant because in elections the outcome depends
only marginally on the individual’s actions.
22. VOTING
Expressive act, with intrinsic
value of expressing one’s
preferences
Voting is a collective action,
with the outcome in doubt.
She doesn’t necessarily get
the candidate she wants.
An election is a public good
that is made available to
everyone, regardless of
whether or how they voted.
ECONOMIC CONSUMPTION
Instrumental act.
Consumption is a private
act, and the consumer alone
determines the outcome
(either pays for the good or
not).
Consumer goods are
private goods.
23. The simple idea of small costs outweighing even smaller
expected benefits C > B helps to “explain” and predict
behavior even if people do not make decisions the way
rational choice theorists claim they do.
Implications for election laws: even small increases in costs
outweigh even smaller perceived benefits of voting.
Examples:
In the U.S., with so many elections and so many offices, the costs of
voting are higher than European countries.
Mandatory voting would increase turnout!
Motor voter registration decreases costs and increases turnout.
Tighter registration requirements increase the costs of voting and can
be expected to depress voting, especially among…?
24. Half the states have them. Some laws blocked
by Obama admin for 2012. “Emerging
research” (2000 to 2006) shows:
The strictest forms of voter identification
requirements — combination requirements of
presenting an identification card and positively
matching one’s signature with a signature either
on file or on the identification card, as well as
requirements to show picture identification —
have a negative impact on the participation of
registered voters relative to the weakest
requirement, stating one’s name.
We also find evidence that the stricter voter
identification requirements depress turnout to a
greater extent for less educated and lower
income populations, but no racial differences.
25. Studying candidate behavior, which is more
instrumental.
Studying the interactions between different
types of actors (e.g., candidates and voters in
spatial models), if we don’t have to take into
account lots of individual variation in the way
actors actually make decisions.
Thinking about a normative model of
decision making; how to make “best” or
optimal decisions.
27. Unrealistic: “homo economicus” voters
must seek out all relevant information on all
issues and all candidates, where each
candidate proposal is an alternative
associated with a range of outcomes and
probabilities.
Ignores constraints in ability & motivation.
Very limited cognitive capacity (small working
memory)
Motivation: P*B rarely > C
▪ Rational abstention, ignorance
Dismisses departures from rational choice.
Treats people’s “irrational” decisions as
noisy and bothersome “errors” that are
meaningless and should be ignored.
28. Alternative A
.25
.75
.6
.4
.2
.8
.7
.3
.4
.6
.1
.9
Alternative B
$500.00
$200.00
$300.00
$400.00
$100.00
$600.00
$650.00
$50.00
•Decision nodes – squares = choice points
•Chance nodes – circles = intervening uncertain events between choices and outcomes
•Probabilities – the likelihood that an outcome will occur
•Expected benefit – payoffs – the consequences of a given combination of choices and chances
30. Many models of rational choice view
the mind as if it were a supernatural
being possessing demonic powers of
reason, boundless knowledge, and
all of eternity with which to make
decisions.
Humans make inferences about their
world with limited time, knowledge,
and computational power.
Simon
Kahneman
31. Instead of a fully rational decision making
process (i.e., an optimal choice with full
information),
Decisions made only after simplifying the choices
in a variety of ways because the decision maker is
a satisficer seeking a satisfactory solution versus
an optimal one
Herbert Simon developed computer models of
actual decision making, artificial intelligence
Known for the concepts of “bounded rationality”
and “satisficing” in realistic models of decision
making.
Herbert Simon was a political scientist as well as a
psychologist and computer scientist
33. Limitations
Cognitive limitations on rationality: Limited working memory means
limited attention, calculations, limited & biased retrieval from
memory, and so on.
Motivation:
Ways of coping: i.e., simplifying decision-making in
“Bounded rationality,” fast & frugal decision making
(Herbert Simon)
Use heuristics (Simon & Kahneman)
▪ Use prior beliefs to make sense of new information
▪ What other cognitive shortcuts?
Decompose decisions into smaller parts,
Edit (ignore) some aspects of decision.
Goals of boundedly rational decision makers
Make “good” decisions (though not the “best” possible)
Use minimal cognitive effort
Costs: while humans often make “good enough” decisions,
we often make poor decisions and are unaware of our
limitations.
34. 1. Stands on the issues
2. Ideology
3. Past or future economic performance
4. Partisan affiliation
5. Personal characteristics
6. Spouse, Dog
36. RATIONAL CHOICE
Strengths
Normative model
Studying interactions among
different types of actors
Better for elites than masses
Parsimony
Weaknesses
Ignores individual differences
Highly unrealistic explanation
Less applicable to political vs.
economic behavior
HEURISTIC CHOICE
Strengths
Realistic explanation of actual human
decision making
Explains “good” as well as “bad,” error-prone
decision making
Suited to masses & elites
Applicable to many behavioral domains,
including politics
Weaknesses
Difficult to aggregate individuals to
macro level behavior (reductionist)
Complexity makes precise predictions
difficult