Tag Archives: Signaling

A signal is only informative if it’s costly enough that it can’t be faked. The logic runs through Spence’s job market model, through deterrence theory, through free speech doctrine, through protest and repression, through campaign finance. Posts under this tag are about situations where the cost of the message is the message — and what happens when the cost structure changes.

Damn, He Asked US About Damascus or, ‘CJT Meets WMD’

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Why did Obama seek Congressional authorization for military intervention in Syria?

There are a number of theories, ranging from the facile to the subtle (and probably including the subtly facile).  The “best” explanation, from my perspective at least, is that President Obama is signaling something about his ability to prosecute a potential conflict (for example, consider this spin of a classic argument, provided by Roseanne McManus).[1]

But here’s a slightly different take, removing foreign relations from the equation.  (In particular, a problem with the signaling argument is that I find it hard to believe that foreign powers actually believe that Congress would hamper active and ongoing military operations, particularly those that are at east potentially trying to secure chemical weapons in the middle of a strife-torn nation that neighbors Israel.)

The basics of the story is that Obama might simply not know what to do. When I say this, I say it knowing that I have no idea what he should do, either.  This is in contrast to my beliefs prior to the 1990 Gulf War (I thought it was a good idea), Afghanistan (I thought it was a good idea), and Iraq (I thought it was a bad idea).

If Obama wants an honest opinion about what to do there, who should he turn to?  Well, in some sense, he should turn to “the voters,” as the real dilemma, it seems, is intervention is seen as right by the citizens.  (This isn’t cynical: this is “classically” democratic in the sense of saying that, collectively, “we” should do what we collectively think is right.)

So, to get a true opinion about this, who would Obama turn to?  Well, he could turn to voters directly, but I will lay this to the side for practical reasons. Instead, he might turn to the directly elected representatives of the people: Congress.

There is a well-known result in political science known as the Condorcet Jury Theorem (CJT), which says (in part) that a majority vote over two alternatives about which everybody has similar (but only imperfectly known) preferences will tend to result in a better choice than if we simply had one person choose on his or her own.[2]

So, the logic of the CJT suggests that, if the consideration is simply “Strike Syria” or “Don’t Strike Syria,” `polling’ Congress will result in a better outcome for President Obama (and all of us) if we also presume (reasonably to me) that the citizens of the US share the same preferences–though we might have different beliefs right now—over the outcomes in Syria.[3]

So far, so good.  But what of the more subtle question: the CJT depends upon the individuals voting sincerely over the two alternatives.  That is, for Obama’s tact to result in “information aggregation” within Congress would require that members of Congress actually do something like poll their constituents, put in the effort to come up with an informed estimate of whether these constituents prefer intervention or not, and then vote this information sincerely.[4] Note that, to the degree that citizens care about the outcome, they might hold their members accountable for this (high-profile) vote if and when those members seek reelection.  Thus, let’s just suppose that a member, if forced to vote on the issue, would rather vote in line with the majority of his or her constituents.

So, why would Congress do this?  After all, some have claimed that Obama is/was looking for a fall guy.  Why not just demur?

Well, on the one hand, the sad reality is that people are and will continue to die in Syria.  Regardless of how, if Congress does nothing AND Obama also demurs, then the blood is arguably then (at least partly) on Congress’s hands.  Hawks in Congress missed a chance to assert our massive and massively expensive military might, Doves missed a chance to vote against war, and the many moderates on this issue in both parties are sitting there looking even more ineffective.

Secondly, Obama’s gambit has set this up as a de facto “Constitutional Moment.” If Congress doesn’t act at all, the presumption that Presidents do and should have great flexibility with respect to unilateral military action will presumably only be bolstered. For similar reasons, Congress can’t/shouldn’t say “do whatever” or “well, you’re going to decide what you decide anyway.”  Thus, unless Congress wants to simply vote “no,” which then results in a high profile and public acceptance of the “blood on the hands” problem above or a de facto Presidential override (thus bolstering the Presidential autonomy dimension), they must “own” this moment.  While this might bias members towards a “yes” vote, this classic article (gated) by my colleague Randy Calvert suggests that this bias—in favor of the President’s stated opinion—actually makes it more likely for a collective decision of  “no” to be persuasive.[5]

So, where are we?  Well, I’ll simply quote President Obama:

Yet, while I believe I have the authority to carry out this military action without specific congressional authorization, I know that the country will be stronger if we take this course, and our actions will be even more effective. We should have this debate, because the issues are too big for business as usual. 

With that, I leave you with this.

____________________

Notes:

[1] Also, in terms of domestic/institutional/public law signaling, Eric Posner provides an excellent take on the real institutional impact of President Obama’s request for Congressional authorization.

[2] There’s a lot of technical details concerning when the theorem actually holds, but I leave those to the side: I mean, hey, this is just a blog post.

[3] I am leaving aside the distinctions between pure majority rule (as in the classical CJT) and the details of Article I, Section 7 of the Constitution.  These distinctions are relatively unimportant, particularly given the fact that Obama is not actually bound by the decision of Congress, so it doesn’t even need to duly pass anything to achieve the goals supposed in this post.

[4] I am also leaving aside the question of coarsening of citizen-level information through the binary vote choices of the 535 members of Congress. For example, if each member votes in line with a delegate model and simply votes the majority support of his or constituents, then a majority of Congress might support intervention with as few as 25% of voters actually supporting it (or vice-versa), but this is both unlikely and beyond the scope of this post.

[5] If I’m blogging, I’m self-promoting, so let’s keep it going.  I have an article (published and gated here; ungated working paper version here) that considers how this type of situation might similarly bias the information that Obama is getting from his advisers.  Similarly, Sean Gailmard and I have an article (published and gated here; ungated working paper version here) that examines how and why the quality of the information presented to Obama in situations such as these might be slanted/altered through bureaucratic procedures and their circumvention.

A Whip Applied Twice Is Half A Whip

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Politico is reporting that Pelosi has sent a fifth letter urging House Democrats to support authorization for military intervention in Syria:

“Pelosi, who says she won’t whip Syria vote, sends fifth letter in a week to colleagues…”

The tweet suggests—to me at least—that the repeated (public) calls to support authorization for military intervention in Syria amounts to whipping, even if not in name.  I write briefly to suggest that this is exactly the wrong inference to be drawn.

To cut to the chase, the notion of a whip in legislative politics is that of party pressure: of exercise of a command-and-control mechanism from party leadership on party rank-and-file: to “get in line,” as it were, on a given matter.

What is special about whipping is that it is not good old-fashioned lobbying: it is supposedly more impressive and effective precisely because it works.  We might disagree about why, but whipping is different than simple lobbying because it is based on partisan-caucus membership, as opposed to “good old fashioned pressure/persuasion.”

This picture is, in classically mysterious terms, enforced/sustained only by the use of it being quite nonobvious.  Parents among us will understand the importance of this feature when you think about expressions like “oh, when Dad used to get that look in his eye…,” “I did it because I knew Mom liked it done that way,” or—most fittingly—“oh, you never heard Mom/Dad say it twice.”

Here, “the parent,” Nancy Pelosi, has said it publicly five times.  At some level, people might say—well, clearly she wants to have the effect of whipping the vote while saying she isn’t.  Really?  To believe this is to equate whipping the vote with getting the votes.  That’s like saying Peyton Manning didn’t care if he threw 7 TDs or had Ronnie Hillman run 3 TDs in, 2 TDs come from Danny Trevathan interceptions (okay, maybe too soon), and have the NFL grant him 14 legacy points.

NO.  PEYTON. CARES.

Almost every leader cares not only about outcome, but also about the perception of how that outcome was achieved.  (See: why did Saddam Hussein—quite nonuniquely—hold elections that he was sure to win?)

If Pelosi was going to whip this, there’s no fifth letter.  Hell, there’s no first letter.  She’d simply remark in an off-the-cuff way, “the President will receive the support his request deserves from the House Democratic Caucus,” and that would be it.

Some have said—quite plausibly—that Pelosi can’t whip the vote even if she wanted to.  Maybe.  In fact, I think that’s probably right.  But, as my previous post elucidated, it’s not clear she wants to.  And, at this point in her career, I don’t think she has much to work for except her legacy and/or what she thinks is right.  Is intervention in Syria right?  I definitely don’t know.  But I do know that, in all likelihood, she wasn’t just randomly choosing whether and when to write public letters to her colleagues over the past couple of days.  She’s the freaking Minority Leader in the House.  This ain’t her first rodeo.

Of course, there’s a good story—in addition to, and not contradictory to, mine—about why she might not whip her caucus than “she doesn’t have the juice.”  In a nutshell: this story is called, “Hey Johnny B., how you like this upside-down version of Article I, Section 7?”

And with that, I leave you with this.

If You Whip Me, The Voters Will Whup Me

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Quoting Politico …

“[House Minority Leader Nancy] Pelosi said Wednesday at an event in San Francisco she does not plan to whip a Syria resolution when it comes to the House floor…”

Leaving aside the moral and strategic questions about the advisability of striking Syria (far beyond my competence), the dynamic unfolding here is intriguig from a Math of Politics standpoint.  Why would Pelosi not whip Democrats to support a president of their party to support an item of the highest profile that he has requested?

There are plenty of ready-made (and randomly-ordered) solutions: (a) Pelosi doesn’t have “the juice” to deliver and wants to cover for the potential of failure, (b) a win for the authorization measure would be at best a wash in terms of political gain for Democrats, given the divided control of Congress, (c) Pelosi is more dove than hawk, or even (d) Obama might prefer to “blame shift” nonaction onto Congress (slash potentially accentuate his own foreseen presidential unilateral action in Syria).

These are all quite viable, but—with the exception of (d)—fairly first-order.  That is, they don’t look at the bigger picture.  Very quickly, let me introduce a fifth option, (e).

(e) Democrats who vote in favor of authorizing military action in Syria would prefer—for reelection purposes—to be seen as doing so sans party pressure as far as possible.

Here’s the quick model: a moderate voter in 2014 is considering whether to vote D or R.  They have a D incumbent and are essentially choosing whether to take the “known” commodity or vote for a relatively unknown replacement from the other party.  Regardless of the voter’s position vis-a-vis military intervention in Syria, this voter (by the presumption that he or she is moderate) would prefer to reelect an incumbent whose preferences are aligned with her own and would be capable of acting on them in times of (electoral) uncertainty.

It seems, at this point, that Americans are not clearly for or against military intervention in Syria. Timing and question wording each make survey responses mover “too much” for anyone to be sure about how a vote in favor of any resolution that authorizes military action will be ultimately interpreted by “the decisive voter” in 2014 in most districts.  (Think Iraq and Afghanistan, and then think Egypt and then think Libya, and then think Rwanda.  And then, seriously, take a moment to both hug those you love and pray for everyone in Syria and elsewhere.)

So, back to the First World Problems of Congressmen (this piece from The Onion is, as usual, apropos and adroit), let’s consider the inference that a voter would make about his or her representative upon seeing a vote for military action after observing/believing that there was party pressure (“whipping”) to conjure/cajole such votes:

“My incumbent might or might not support military action.  Conversely he or she might be predisposed to follow the party line, because his or her vote might be the result of party pressure.”

On the other hand, if there is no party pressure, [1] the voter would infer

“My incumbent was subject to no party pressure.  Accordingly, I treat his or her vote as a relatively uncontaminated signal of his or her position on [whatever the voter thinks the Syria vote represents].”

The second scenario is obviously more transparent and, accordingly, (perhaps naively) normatively appealing.  But it is strategically riskier for the incumbents.  Why would Pelosi do it, rather than providing cover for the incumbents, as is the normal presumption about the optimal approach for electorally secure leaders with respect to tough votes?

Well, I think a key point here is that many Democrats in the House are in “safe districts,” where their greatest “net electoral threat” based on their vote(s) on Syria comes from the left (i.e., in the primary).  Accordingly, voting in favor of military action in Syria is actually easier for incumbents if there is no party pressure: self-described “liberals” distrust Obama (and presumably, Pelosi if she trotted out a whip to support Obama) on Syria. In a somewhat surprising sense, Pelosi applying no party pressure to Democrats may make it easier/more likely for Obama to secure votes from House Democrats than if she went public (or didn’t deny) that the party apparatus was whipping votes to support the President.

I thought this would be short: in my mind, the model is quite stripped down…sparse even. But context matters…and with that, I leave you with this.

___________________________

[1] I will not go into the signaling/auditing game that follows from thinking about Pelosi’s incentives with respect to whether to truthfully announce her intention to whip.  That’s also very interesting, but much more complicated.  And, hey, this is just a blog.  At some point, we all have to be sincere or at least presume that everybody else is. #Godel

There is no Networking without “two” and “work” or, Incentives & Smelt at APSA!

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As Labor Day weekend approaches, scores of scholars are steeling themselves for the “networking experience” that is the annual meeting of the American Political Science Association.  Of course, the main value of networking is establishing relationships.  For example, meeting new people can lead to coauthorships, useful information about grants/jobs/conferences, invitations to give talks, and so forth.

Like it or not, networking is important: to be truly successful in social science (and any academic or creative field), your ideas have to reach and influence others, and the constraints of time and attention lead to a variant on “the squeaky wheel gets the grease” in this, and all, professions.  Networking both exposes others to your ideas and, in the best case, helps you generate (sometimes, but not always, in overt cooperation with others) new ones.

All that said, I wanted to make three quick points about what this aspect of the role of networking implies, from a strategic (but not cynical) standpoint, about how one should network.

1. To the degree that one wants to create a relationship through networking, it is better, ceteris paribus, that the relationship have a longer expected duration.  Nobody washes a rented car (see: Breaking Bad), and in terms of dyadic relationships, the length of the relationship is bounded above by the shorter of the two scholars’, ahem, “time horizons.”

2. To the degree that one wants to generate, produce, and publish influential ideas, it is better, ceteris paribus, to create relationships with those who have stronger incentives (e.g., getting a job, getting tenure, being promoted, etc.) than with those who have lower extrinsic incentives to “get stuff out the door.”

3. To the degree that one wants to avoid conflicts of interest in terms of shirking, credit-claiming, and so forth, it is better (as in the repeated prisoners’ dilemma) that both parties have long time horizons so as to increase the (both intrinsic and extrinsic) salience of potential future punishment/comeuppance for transgressions.

All three of these factors suggest that, if you’re a young scholar considering who to spend time with in Chicago in two weeks, don’t forget to meet other young scholars.  Share your ideas, buy a round of smelt, and remember why you’re doing this.  Similarly, it is also important to remember the famous line from Seinfeld:

When you’re in your thirties it’s very hard to make a new friend. Whatever the 
group is that you’ve got now that’s who you’re going with. You’re not 
interviewing, you’re not looking at any new people, you’re not interested in 
seeing any applications. They don’t know the places. They don’t know the food. 
They don’t know the activities. If I meet a guy in a club, in the gym or 
someplace I’m sure you’re a very nice person you seem to have a lot of 
potential, but we’re just not hiring right now.

With that, I leave you with this.

“Strength & Numbers”: Is a Weak Argument Better Than A Strong One?

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Thanks to Kevin Collins, I saw this forthcoming article (described succinctly here) by Omair Akhtar, David Paunesku, and Zakary L. Tormala.  In a nutshell, the article, entitled “The Ironic Effect of Argument Strength on Supportive Advocacy,” reports four studies that suggest “that under some conditions…in particular, presenting weak rather than strong arguments might stimulate greater advocacy and action.”

This caught my attention because I think a lot about information and, in particular lately, “advice” in politics.  One of the central questions (in my mind at least) in political interactions is when communication can be credible/persuasive.  I was additionally attracted, given my contrarian nature, to the article because of statements such as this:

[These findings] suggest, counterintuitively, that it might sometimes behoove advocacy groups to expose their supporters to weak arguments from others—especially if those supporters are initially uncertain about their attitudes or about their ability to make the case for them. (p. 11)

Is this actually counterintuitive? I would argue, unsurprisingly since I’m writing this post, “no.”  Why not?

I have two simple models that indicate two different intuitions for this finding, both in a “collective action” tradition.  In addition to sharing a mathematical instantiation, also common to the motivations behind both of these models is the fact that the article’s findings/results are largely confined to individuals who already supported the position being advocated.  For example, weak “pro-Obama” arguments were more motivating than strong “pro-Obama” arguments among individuals who supported Obama prior to exposure to the arguments. (The effect of argument strength was insignificant and actually in the opposite direction among those who did not support Obama prior to exposure.)

My focus on collective action in this post is justified because the 4 studies reported in the paper each examined advocacy for a collective choice (either an election of a candidate and adoption of a public policy). Thus, in all studies, advocacy can potentially have an instrumental purpose: secure the individual’s desired collective choice.  Accordingly, suppose that an individual i is predisposed to support/vote for President Obama.  To keep it simple, suppose that advocacy is costly—if advocacy is less likely to affect the outcome of the election, then individual i will be less likely to perceive advocacy as being “worth it.”

Collective Action: Complementary Strength and Numbers. The question is how individual i should react to hearing a pro-Obama argument from a “random voter.”  If the argument is weak, should individual i—who, remember, already supports Obama—view advocacy as more or less likely to affect the outcome?

Well, suppose for simplicity that the election outcome is perceived to be a function like this:

f(q,n) \equiv \Pr[\rm{Obama\; Wins}] = \frac{ q * n }{1+ q * n},

where q>0 is the quality of the best argument that can be made for Obama (a content-based persuasive effect), and n>0 is the number of advocates for Obama (a “sample size”-based persuasive effect).  Then, being a bit sloppy and using derivatives (approximating n being large), the marginal value of advocacy is

\frac{ q }{1+ q * n} (1-f(q,n))

and, more importantly, the marginal effect of quality on the marginal value of advocacy (the “cross-partial”) is

\frac{2 n^2 q^2}{(n q+1)^3}-\frac{3 n q}{(n q+1)^2}+\frac{1}{n q+1}

The key point is that, for reasonable range of parameters (specifically in this case, if n and q are both larger than 1), increasing the perceived quality of the best argument that can be made for Obama reduces that the marginal instrumental value of advocacy for an Obama supporter.  Note that the perceived quality of the best argument that can be made for Obama is a (weakly) increasing function of the observed quality of any pro-Obama that one is presented with.  In other words, observing a higher quality pro-Obama argument should lower an Obama support’s motivation to engage in advocacy.

Collective Action: Increasing Persuasive Strength. For the second model, let’s pull “numbers of advocates” out and, instead, let’s modify the election outcome model as follows:

f(q) \equiv \Pr[\rm{Obama\; Wins}] = \frac{ q}{1+ q},

where q>0 is the quality of the best argument that is made for Obama.  Now, add a little bit of heterogeneity.  Suppose that a(i) is the quality of the best argument that individual i “has” in favor of Obama.  This, at least initially, is private information to individual i, and suppose it is distributed according to a cumulative distribution function G.  Suppose for simplicity that the argument to which individual i is exposed is the best he or she has yet seen (this isn’t necessary, but allows us to get to the point faster), and denote this by Q.  Furthermore, suppose that individual i will find it worthwhile to advocate (i.e., spread/share his or her own pro-Obama arguments) if a(i)>Q. (This is similar to assuming that advocacy is costless, but this is not important for the conclusion.) Then what is the probability that individual i will find it strictly worthwhile to advocate after observing an argument of quality Q?  Well, it is simply

1-G(Q)

Since G is a  cumulative distribution function, it is a (weakly) increasing function of Q.  Thus, 1-G(Q) is a (weakly) decreasing function of Q.  Again, observing a higher quality pro-Obama argument should lower an Obama support’s motivation to engage in advocacy.

What’s the point?  Well, first, I think that information is a very interesting and important topic in politics—that’s “why” I wrote this. But, more specifically, it is ambiguous how to interpret the subsequent lobbying/advocacy behaviors of individuals with respect to varying qualities of information/arguments offered by others when individuals expect that the efficacy of their lobbying/advocacy efforts is itself a function of the quality of the argument.  In these examples, in other words, individuals might not be learning just about (say) Obama, but also about how effective their own advocacy efforts will be.  If this is the case, I humbly submit that the findings are not at all counterintuitive.

With that, I leave you with this.

Want It Now? Oh, We’ll Give It To You…Later

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Did the Senate ironically kill (for the time being) an immigration deal by passing an immigration bill?  Arguably, yes.

Control of the Senate is up in the air in the 2014 elections. On the other hand, the GOP seems pretty likely to maintain its majority in the House. If the GOP wins control of the Senate and holds onto the House majority in 2014, then the GOP can control the finer points of an immigration bill in the 114th Congress.  The only practical impediments standing in the way of enacting the bill would be

  1. A filibuster by Democrats in the Senate and
  2. A veto by President Obama.

President Obama has come out strongly in favor of immigration reform, so let’s set that aside. The more interesting angle is the first one.  I wrote recently about the nuclear option, though it seems like we’re now at no worse than Defcon 2. Clearly, if the nuclear option is pulled in its strongest form and legislative filibusters are effectively neutered, then (1) would no longer present an impediment.  So, let’s presume that “the button” is not pushed.

It seems incredibly unlikely that the GOP will hold 60 seats in the Senate in 2015, so the Democrats could stand together and block an immigration bill that they “did not like.”  But, is this likely now?

I argue no, for two reasons.  First, every Democratic Senator voted in favor of S. 744, the Senate’s immigration bill. For some, this was a tough vote, at least in electoral terms.  Thus, these Democrats have already sent a high profile and potentially costly signal that immigration reform is “important” and (this is important) for the Senators who viewed it as “a tough vote,” the sensible implication is that they want their skeptical constituents to believe that immigration reform is important for policy reasons (not partisan ones).

Accordingly, imagine that the GOP presents these Democratic Senators with a modified immigration bill, similar in many respects to S. 744.  Voting against, not to mention pursuing what might end up being high profile efforts to block, such a bill would be arguably seen as partisan obstructionism.  To be succinct, such efforts are not typically viewed favorably by exactly those voters who were/are skeptical of a Democratic incumbent: these are voters who tend to vote Republican but presumably might give a Democrat the benefit of the doubt if the incumbent is perceived to be competent, faithful to the state’s/the nation’s interests, etc. 

But, remember, these incumbents will have already claimed that immigration reform is important and, arguably, faithful to their states’/the nation’s interests.  In a nutshell, the worries for the Democrats right now about immigration reform are actually focused on those Democratic Senators facing reelection in 2016.  If these members can’t stand the prospect of being seen as overly partisan (or, perhaps, as a flip-flopper), then the GOP can easily count on being able to get enough Democrat cross-overs to reach 60 votes if they control the Senate’s agenda through holding a majority of its seats in the 114th Congress.

Finally, Boehner and the House Republicans are probably thinking about exactly this possibility, given the meaningful possibility that the GOP might win control of the Senate in 2014.  Accordingly, in conjunction with the apparent security of their majority in the House, the House Republicans have little to no incentive to consider any immigration bill this Congress, precisely because the Senate Democrats passed one this Congress.  Finally, note that many Senate Republicans also voted for the immigration bill, which merely strengthens the argument.

With that, I leave you with this.

Remuneration Of The Nerds, Or “Putting the $$ in LaTeX”

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I’ve been thinking a lot about signaling lately. The central idea of signaling is hidden (or asymmetric) information. A classic example of signaling is provided by education, or more specifically, “the degree.”

Suppose for the sake of argument that a degree is valuable in some intrinsic way: a college degree is arguably worth $1.3 million in additional lifetime earnings. (Let’s set aside for the moment the level of tuition, etc., that this estimate (if true) would justify in terms of direct costs of a college degree. I’ll come back to that below.)

Instead, let’s think about the basis of this (“market-based”) value.  A simple economic story is that the education & training acquired through obtaining the degree increase the marginal productivity of the individual by (say) $1.3M.  Well, I don’t even REMEMBER much of college (and probably thankfully…AMIRITE?), so this seems unlikely.

Another, more interesting (to me at least), explanation is that the value of the degree is through its signaling value.  There are a number of explanations consistent with this vague description, including

  1. College admissions officers are good (in admissions and the act of “allowing to graduate”) at selecting the “productive” from the “unproductive” future workers.  Maybe.  College admissions is hard, and I respect those who carry the load in this important endeavor.  But…
  2. Finishing college shows “stick-to-it-iveness” and thus filters the “hard workers” from the “lazy workers.”  Again, this is undoubtedly a little true.  But there are other ways to “work hard.”  So, finally…
  3. College does 1 & 2 and, to boot, adds a “selection cherry” on top.  In particular, the idea of the college major allows individuals to somewhat credibly demonstrate the type of work they find most appealing (controlling for market valuation, to which I return below).

Explanation 3, as you might expect, is the most interesting to me.  What am I thinking?  Well, back when I was a kid, going to law school was considered a hard, but not ULTIMATELY HARD way to score some serious dough in one’s first job.  Sure, it took some money, and some serious studying, but—HAVE YOU SEEN THOSE STARTING SALARIES?  HAVE YOU SEEN “THE FIRM”?  Oh, wait.  Wait…no, seriously…YOU CAN BE TOM CRUISE AND WIN IT ALL.

On the other hand, math (pure or applied) was considered a “very good, but…come on” kind of major.  In particular, a perception (not completely inaccurate) was that math was hard, but didn’t really “train/certify” you for any job other than, perhaps, being a math teacher.  But, this argument falls on its face after a bit of thought: you can be a math teacher without being a math major.  (I’m proof of this general concept, I am a “political science teacher” and was a math/econ double major.)  So, what gives?  Why would you be a math major?

Because you are intrinsically motivated (i.e., you “like math problems”).  In other words, you are signaling a true interest precisely because there are other, arguably easier, ways to get to the same moolah.  Which means that you’ve sent a (potentially costly) signal to potential employers that this is “what makes you tick.”  This is the information that your degree provides: you have shown them costly signals of what you actually like to “stay late” and work on.

The same argument goes for majors that are both demanding and relatively specialized, (e.g., petroleum engineering, actuarial sciences): employers can be more certain upon seeing such a degree that you really want a career in this—you like it (where “it” is the substance/drudgery of what the job entails).

In other words, to the degree (pun intended) that the value of college is just about selection (explanation 1), then admission to the “marginal school” (i.e., any school that admits every applicant) should be valueless (which I don’t think it is).  If the value of college were just about “showing you can finish something” (explanation 2), then the value of college would be no different/less than completing four years of (say) military or missionary service.  (And, maybe it is no different, but many people follow such admirable service by pursuing a college degree.)

Accordingly, the fundamental signaling value of a college degree is arguably not in its possession, but in the information contained about how it was obtained.  In other words, “the major.”  Of course, there are other, but in my mind ancillary, determinants of the value of a college degree.  As my Dad told me when I was growing up (which is kind of meta),

It isn’t all about the destination—half the fun is in “getting there.”

If that wasn’t true in terms of how one’s actions are interpreted, then one’s actions are even more easily interpretable.  Stew on that for a second.

Finally, in terms of the “math of politics” of this reasoning, note that costly signals are everywhere, and they are important far beyond college: legislative committee assignments, the development of reputations by “policy entrepreneurs” (I’m looking at you, Ron Paul, Ted Kennedy, & John McCain), the development of expertise/autonomy in bureaucracies/central banks, the emergence of “neutral independence” in judiciaries, and the credibility of “dying on the hill for a cause” necessary for policy bargaining by “fringe” political groups (see: Green Party, Pro-Choice/Life groups, PETA, Tea Party, Muslim Brotherhood, ACLU).  There are many, many applications of the notion that value is assigned by selectors (voters, employers, the unmarried) in signals that more precisely reveal hidden information about the tastes/predilections/goals of those vying for selection into potentially long-term, repeated relationships.

With that, I leave you with this.

Believe Me When I Say That I Want To Believe That I Can’t Believe In You.

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A recurring apparent conundrum is the mismatch between Congressional approval (about 14% approval and 78% disapproval) and reelection rates (about 91% in 2012).  If Americans disapprove of their legislators at such a high rate, why do they reelect them at an even higher rate?  PEOPLE BE CRAZY…AMIRITE?

Maybe.  A traditional explanation is that people don’t like Congress but like THEIR representatives.  Again, maybe.  Indeed, probably.  But, in the contrarian spirit of mathofpolitics, I wish to forward another explanation.  This explanation is undoubtedly wrong, but raises an interesting welfare point that could still hold even if the microfoundations of the explanation are amiss.

The heart of the explanation is that a cynical belief along the lines of “all politicians are crooks” can help voters get better/more faithful representation from their representatives.  Thus, ironically, a deep suspicion among voters about the accountability of legislators can aid one in keeping those legislators behaving in accord with the voters’ wishes.  (PEOPLE BE CRAZY LIKE A FOX…AMIRITE?)

Now, let’s get to the argument/the model.

Theoretically, elections might help achieve accountability (i.e., make incumbents do what voters want) through their potential ability to solve two important problems: moral hazard and adverse selection. The essence of moral hazard is “hidden action”: I want my representatives to work smart AND hard, but I can’t actually observe them working.  Instead, I observe noisy real-world indicators of how hard they’re working: unemployment, budget deficits, health care costs, Olympic medals, and Eurovision.  To the degree that these are correlated with legislative effort and I condition my vote choice on these observables, I can provide an incentive for a reelection-motivated incumbent to work smart and hard.

The essence of adverse selection is hidden information: I want my legislator to take actions on my behalf when they present themselves.  The best way to “get this” is to have a legislator who shares my preferences.  (Think Fenno’s Home Style.) But, practically speaking, every aspiring representative will tell me that he or she shares my preferences.  So, regardless of how I discern whether my incumbent shares my preferences, the reality is that I will have a strict incentive to reelect an incumbent who expect shares my preferences…because, after all, I generally have little information about his or her challenger’s preferences.

So, in a nutshell, you’d like to solve both of these problems simultaneously: you want your incumbent to share your preferences and work both smart and hard.  In the immortal words of Bachman Turner Overdrive, you want them to be taking care of business and working overtime. Every day. Every way.

Unfortunately, solving both of these problems is frequently impossible.  The details of why can be summed up with the old saying that “a bird in the hand is better than two in the bush.” You see, once you believe that your legislator truly has your interests at heart, you will (and, in a certain way, should) be more likely to forgive/reelect him or her if he or she is a little lazy.

This fact ends up making it harder for a voter to discipline his or her representatives: in particular, think of the following simple world.  Assume there are faithful and faithless politicians (this is fixed for any given politician) and that every politician can either work hard or be lazy. And, for simplicity, suppose that the faithful type always works hard. (This is not important, it just simplifies the exposition.)

Furthermore, let p \in (0,1) denote the probability that a random incumbent is faithful.

Here’s the rub: you don’t observe the politician’s type (faithful or faithless) or how hard he or she worked.  Rather, you observe one of three outcomes: Great, OK, or Bad.  Finally, suppose that the probabilities of observing these outcomes are

P[Great | work hard & faithful] = 0.35
P[OK | work hard & faithful] = 0.55
P[Bad | work hard & faithful] = 0.1

P[Great | work hard & faithless] = 0.3
P[OK | work hard & faithless] = 0.5
P[Bad | work hard & faithless] = 0.2

P[Great | be lazy & faithless] = 0.1
P[OK | be lazy & faithless] = 0.5
P[Bad | be lazy & faithless] = 0.4

(If you take a moment, you’ll realize that outcomes are more likely to be better for faithful types regardless of how they work and for those who work hard, regardless of their type (i.e., ceteris paribus). …JUST AS IN LIFE.)

To illustrate the problem at hand here:

Suppose that the voter observes an “OK” outcome.  what is the voter’s posterior probability that the politician is a faithful type?

\Pr[\text{faithful}|\text{outcome=OK}] = \frac{0.55p}{0.55p + (1-p)(0.5 x + 0.5 (1-x))}=\frac{0.55p}{0.5+0.05p}>p,

where x denotes the probability that a faithless politician works hard.  (Note that my judicious choice of probabilities obviates the need to worry about what this is.  YOU’RE WELCOME.)

The key point is that the probability that the politician is the faithful type, conditional on seeing only an “OK” outcome, is greater than p, the probability that a random challenger will be a faithful type.

This means that, upon seeing an “OK” outcome, you should reelect your incumbent.  He or she is a (probabilistic) bird in the hand.

So what?  Well, this all goes away if you believe that there are no faithful politicians.  That is, if you’re a hard-core cynic (as many of my FB friends purport to be), and you believe p=0, then upon observing an “OK” outcome you can credibly (and, concomitantly, “should”) throw the bum out.  If p=0, then (assuming that working hard is not too costly to the incumbent) the optimal reelection rule in this setting is to reelect if and only if the outcome is “Great.”  Furthermore, imposing such a rule in such cases will yield a higher expected outcome for you (the voter) than you can obtain in equilibrium when p>0.

In summary, it’s a lot easier to “throw the bums out” if you actually think they’re all bums. This, ironically, will both make you better off and lead to you throwing fewer out, because the “bums” will know what you think of them.

Tying this back to real-world politics, the mathofpolitics/logic of adverse selection and moral hazard suggest a somewhat subtle value of cynicism in politics.  (Which, perhaps seemingly oddly for a game theorist, is something I detest.)  What is also kind of neat about this logic is that it provides an interesting argument in favor of primaries: the whole logic of why adverse selection undermines the solution to the moral hazard problem is that the voter can not select a replacement who is “just/almost as likely as the incumbent” to have the same innate interests as the voter.  To the degree that we believe that this type of alignment between incumbents and voters is correlated with the incumbent’s partisanship, primaries offer the voters a (more) credible tool to discipline their incumbent’s moral hazard problem.

And with that, I am left thinking of Arlen Specter and accordingly want to leave you with this.

Just So You Know, I Won’t Know: The Politics of Plausible Deniability

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The IRS scandal, and in particular the handling (or, mishandling) of it by President Obama’s counsel, Kathryn Ruemmler, has raised a classic question: what did the President know, and when did he know it? In my mind at least, the question is predicated on the presumption that the president ought to know everything that is going on in the federal government.  After all, he is the administrator-in-chief, “the CEO,” the boss, the decider, the frickin’ POTUS!

A key point to remember through all such “management scandals” such as this is that the federal government is not a business, and particularly not the simplistic understanding of what “a business” is.  The reality is that the effectiveness of government can not be properly judged in an unambiguously unidimensional fashion like a classic (again, simplistic) business can be judged by its profits.  After all, one person’s “pork” is another’s “public purpose.”

That said, the real “mathofpolitics” point of this post is, even if the effectiveness of a government could be judged in a simple and uncontested unidimensional fashion, there are still situations in which the boss should not know everything that is going on.  Mind you, this is not a feasibility/constraints argument such as “the boss is simply too busy to worry about that).  Ironically, it is the opposite: there are situations in which the boss should not know some fact X precisely because the boss might care too much about X.  In other words, there are situations in which voters/shareholders (i.e., “principals”) might want their politicians/CEOs to not know something.  That is, the notion of plausible deniability is not exclusively a polite term for nefarious blame avoidance.

As I wrote a few days ago, political accountability is almost inherently an adverse selection problem. We as voters worry, and I think rightly, about the true motivations and goals of our representatives.  It is a little complicated, but consider the following simple situation to understand the importance of plausible deniability.

Suppose that a politician is charged with reviewing applications for grants.  Should the grant applications include the name of the applicants?  Well, practical concerns answer this in the affirmative: how else can you award grants if you don’t to whom to award them?

So, supposing the applications have the names on them, should the names be removed prior to the politician’s review of the applications?  That is, should the review be “blind” with respect to the applicants’ identities?  Before you answer, “yes, it’s only fair,” think why this is the case, because the reason is (at least) two-fold.  The more obvious of these two folds is based on the possibility that the politician is biased in favor (say) people who share his or her political views or partisanship.  (And let’s reasonably suppose that such favoring would be bad/inefficient relative to the goals of the grant program.)

In this scenario (the heart of the adverse selection worries alluded to above), removing the names creates a “more efficient” award process because it removes something that the awarding of the grants should not be conditioned upon from the ultimate determination of the awards.  This is a direct argument for “insulating” the politician from a piece of information about what’s going on in the government (i.e., who‘s getting grants?).

The second fold is more subtle.  Suppose that the politician is unbiased.  Technically, suppose that you almost certain that the politician is unbiased (i.e., the probability that the politician would exhibit favoritism is arbitrarily close to zero).  In simple probabilistic/expected utility terms, the argument sketched above would suggest that the gain from removing the names from the applications is also arbitrarily close to zero.  So, that argument would follow, you shouldn’t “pay much” or “go to much trouble” to remove the names from the applications, right?

Wrong. While this argument is correct “at the limit”—i.e., when the politician is absolutely, positively, without a doubt known to be unbiased—it falls apart (in game-theoretic terms, “unravels”) when there is even a scintilla of a (perceived) chance that the politician is biased.  The reason for this is that the politician, if he or she knows that the voters know that the politician can see the names, needs to worry about the voters inferring something (or “updating their beliefs”) about whether the politician is actually biased.  If he or she awards “too many” awards to his or her buddies (or, if we think there are a few friends, a few enemies, and a third group of non-friends/non-enemies, if the politician awards “too few” awards to his or her enemies), then a sophisticated voter will have increased (and perhaps greatly increased) reason to believe that the politician is actually biased.

The actual effect of this dynamic—for example, whether it will lead to too many or too few awards being awarded—depends on the parameters of the problem (specifically, the net benefit of an extra award and the weight that voters think a biased politician assigns to helping friends/hurting enemies), but the key to this second fold of the argument is as follows:

An unbiased politician will (ironically) condition his or her decisions on the names of the applicants if the politician is known/believed by the voters to have had the names when making his or her decisions.

So, when an advisor goes to great lengths to make it known (i.e., tells others, records the facts, etc.) that he or she did not tell the politician “the names,” this is not necessarily a “cover up.”  Rather, and particularly when the names are “politicized” (i.e., the awards are coming out in a biased way), this approach can be required (even if ultimately unsuccessful) to support a “de-politicized” decision process by the politician.

Another way to think of this is as follows: suppose that the politician chooses 10 awards, and the advisor, upon looking at the names in another room, realizes that the politician has given awards to 10 enemies.  At first blush, one might think—well, heck, if the politician is unbiased, then he or she could be told this fact.  But this is not true, because if this were a possibility, we (the voters) would (or should) wonder exactly whether the advisor told the politician that and the politician changed his or her mind/redid the awards whenever we see 10 of the politician’s friends receive awards.

Is this dynamic at play in the IRS scandal?  Yes.  It is at play throughout the federal government everyday.  For example, the idea of the special prosecutor (or special counsel) is entirely based on it.  Viewed from a strategic point, whether Obama should appoint a special counsel in this case is not unambiguous, as it could be akin to a Chamberlain moment vis-a-vis the House GOP, but I think I agree with Bill Keller that he should.

With that, I leave you with this.

 

 

Now, I’ll Show You Mine: Why Obama Budged A Bit on the Budget

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President Obama proposed his 2014 budget this week.  A huge document, it contains a number of interesting policy proposals.  One that is attracting a lot of attention concerns the “chained CPI.” In a nutshell, this change will reduce the rate of growth in social security payments over the next decade.  Overall, the proposal arguably represents a compromise with Congressional Republicans.  Perhaps understandably (although this is a classic chicken-egg situation), some Congressional Democrats and liberal interest groups are outraged. Did Obama overreach?  Has he sold out his party? To both questions, I argue “no,” and I also assert that, while Obama may be a pragmatist, this proposal isn’t a fair-minded compromise with the GOP.  It’s far more aggressive than that and positioned for the 2014 elections.

From a strategic standpoint, Obama is in an interesting situation.  He’s a lame duck president with a receding mandate and an approaching midterm election.  I think he has policy/legacy motivations to drive him to do more in his second term than most (all?) two-term presidents.  Accomplishing this would be greatly assisted by the Democrats doing well in the 2014 midterm elections.  (And, of course, he might want such a thing either on partisan or personal grounds, too.)

Going into 2014, the Democrats are in a tough situation in the Senate and a long-shot in the House. So how does Obama’s proposal affect this?  Not much in the grand sense, of course, because budget proposals are “inside baseball” for the most part and it seems unlikely (to me at least) that the public will buy into the narrative that “Obama is attacking Seniors.”

However, Obama’s proposal puts the House GOP in a bind and, by extension, potentially presents Senators of both parties with a challenge.  On the one hand, the House GOP can not simply “sign off” on Obama’s budget: for one, it raises taxes and, two, it’s Obama’s budget.  In taking a stand against his budget, though, the House GOP must come up with a reason.  While Boehner can try to claim that the proposal is incremental and doesn’t go far enough with respect to entitlement reform, this approach forces the GOP to come up with an even more aggressive plan or keep pushing the Ryan plan. Given the public’s lack of support for cutting social security, and the fact that Social Security is technically “off budget” and therefore of little value in reducing the budget deficit in the short term, it’s not clear to me what the GOP can counter with in terms of spending.  (And, of course, I wrote about this last year: there’s almost no way to balance the budget without new revenues or dramatically shrinking the defense budget.)

One way to view this is that Obama has “caved” to GOP demands and that this is another example of Obama not realizing that Congressional Republicans can not be dealt with.  Somewhat ironically, Obama’s very public and tangible concessions (even if “incremental”) are arguably the strongest positive bargaining move he has made in recent years. The key words here, and the “math of politics” of this post, are public and tangible.  By going public with a specific proposal, Obama is framing the next stage of the budget process. He is putting the spotlight on the Republicans and thereby calling their bluff that they have a politically feasible budget plan. (It’s a dual version of the logic I sketched out during Boehner’s stratagem during the fiscal cliff showdown.)

It is important to note that Obama’s budget was two months late.  He waited until after sequestration hit, after the House and Senate each passed their own budget resolutions.  In a colloquial sense, this forces the House GOP to respond to his proposal, as opposed to the Senate’s.

By going public (as opposed to privately bargaining with Boehner), Obama imposes “audience costs” on both himself and the House GOP.  For Obama, he would face a potentially huge cost if his budget was approved and sent to his desk for his signature.  (This isn’t going to happen, but a partial version could.) For the House GOP, of course, it now has the public’s attention on their budget priorities again.  That hasn’t worked out so well in the past.

By being tangible (i.e., by including the specific, headline garnering proposal regarding Social Security), Obama has arguably placed himself as the compromiser.  More importantly, Obama’s proposal presents Congressional Democrats with a useful foil and “clear indicator” of the importance of the 2014 elections.  Key here from Obama’s perspective is that he’s a lame duck president: if he has policy goals, he can be less concerned with maintaining his short-term popularity.  He can also turn to his partisan base and say (truthfully, in my opinion): “if you want Democratic priorities to win, you need to give me—and you—a Democratic House.  More importantly, perhaps, you better be darned sure the Democrats hold onto the Senate.”

With that, I think of the President of the Senate, and leave you with this.