Wednesday, October 10, 2012

Behavioral econ and voting behavior

As a quick side-note to the previous post, I was told that I seem to really like Woodford's theory paper and that I should work on it. That's probably true. One thing that is fascinating in politics and how people vote is the importance of party labels. There are two main papers on this, that used the incidence of partisan and nonpartisan elections in the judiciary: how do voting patterns change between two comparable elections where only one o them has candidates explicitly linked to parties?

Squire and Smith use 1982 California sate supreme court confirmation contests and rely on survey data where the sample was split between people who were told the partisan affiliation of a candidate, and those who were not. Conclusion:

Partisan information increases the probability of an individual holding an opinion on the
elections, and results in votes which are based on the respondent's partisan identification and
opinion of the governor who appointed the justice. 

Snyder and Lim, more recently, have strong findings. The sad news:
we find that incumbent judges' quality has little effect on their vote share or probability of winning in partisan general elections...
we fi nd that voting is highly partisan in partisan judicial elections -- i.e., there is a strong correlation between the Democratic "normal vote" and the Democratic vote share for judges --but not in non-partisan or retention elections.

The nice thing with Woodford's paper is that the cognitive constraint explains the decoy effect. Consider the example of Huber et al. two goods that differ on price an quality, one is low price-low quality and one is high price-high quality. In the Figure below, those are the "Competitor" and "Target" goods. Each good dominates the other on one dimension. Let's assume for our example that the Target good is the high-quality high-price one. You can look at the choice people make based on this choice set.
Now, consider a new choice set where you introduce a good with intermediate quality (dimension 2) and higher price (dimension 1) than both goods. This is the shaded area in the picture. You can see that introducing this Decoy makes the choice still hard between the Decoy and the Competitor, but the choice between the Decoy and the Target is easy: the Target is the best product on both dimensions. The fact that the comparison is easy leads to the Target product being selected more often than initially.

Partisan labels are useful because they provide an easy dimension of comparison between the two candidates. One extra problem is that the interpretation of party labels is not clear. But that's a question for another time...

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