Skip to main content

Guilt aversion verus lie aversion, the case of Donald Trump and Hilary Clinton

One of the more bizarre aspects of the recent US Presidential election campaign was the ability of Donald Trump to tell more lies and half-truths than most of us would do in a lifetime and yet still claim that Hilary Clinton could not be trusted in office. Even more bizarre, was the fact that he got away with it! How can we possible make sense of this? Some might point to a dumb electorate. I think we can learn more by looking at guilt aversion.
             The concept of guilt aversion was formally introduced into game theory by Pierpaolo Battigalli and Martin Dufwenberg with a paper published in the American Economic Review in 2007. (I should also mention a paper by Gary Charness and Martin Dufwenberg in Econometrica in 2006.) The basic idea is that a person only needs to feel guilt if they disappoint the expectations of others. To illustrate, consider Donald Trump's 'promise' to lock up Hilary Clinton. Nobody realistically expects Trump to fulfil this promise. But, because nobody realistically expects him to lock her up then he needs to feel no guilt making and breaking the promise. It is all cheap talk.
              If everything is all cheap talk then Trump can say what he likes, nobody can believe it, he can predict that nobody will believe it, and everything works out fine! And it is noticeable that post election none of his supporters seem particularly upset that many campaign promises have fallen by the wayside. The only promise people seem to really care about is his promise of trying to make America great again. If he does not fulfil on that promise then he really should feel guilt.
            Hilary Clinton, by contrast, seems to have been judged by different standards. She is expected to tell the truth and nothing but the truth. Which is presumably why the email controversy took on such a huge importance. Any sign that she had let down expectations was taken as a signal that she could not be trusted.
           Ultimately, though, this meant we have a good idea what Hilary was intending to do as President. With Donald Trump, by contrast, we don't have a clue. We have a good idea about some things he will not do - lock up Hilary, build a wall on the Mexican border etc. - but beyond that it is uncertainty. Usually uncertainty is a bad thing and Trump would not have had a chance. We seem to live in a world, however, where uncertainty is becoming ever more appealing to voters. That opens the door for a whole lot more bullshit in the future.
            Interestingly, the evidence of guilt aversion in the experimental lab is mixed. In particular, there is a fair amount of evidence for lie aversion. The basic idea here is that a person feels bad if they lie. In this case it is irrelevant whether or not anybody expects the person to keep their promise, the person simply does not like to break their promise. So, Donald Trump would feel averse to making a promise he knows he cannot keep. Which does not sound much like Donald Trump.
                   

Comments

Post a Comment

Popular posts from this blog

Revealed preference, WARP, SARP and GARP

The basic idea behind revealed preference is incredibly simple: we try to infer something useful about a person's preferences by observing the choices they make. The topic, however, confuses many a student and academic alike, particularly when we get on to WARP, SARP and GARP. So, let us see if we can make some sense of it all.           In trying to explain revealed preference I want to draw on a  study  by James Andreoni and John Miller published in Econometrica . They look at people's willingness to share money with another person. Specifically subjects were given questions like:  Q1. Divide 60 tokens: Hold _____ at $1 each and Pass _____ at $1 each.  In this case there were 60 tokens to split and each token was worth $1. So, for example, if they held 40 tokens and passed 20 then they would get $40 and the other person $20. Consider another question: Q2. D...
Post a Comment
Read more

Measuring risk aversion the Holt and Laury way

Attitudes to risk are a key ingredient in most economic decision making. It is vital, therefore, that we have some understanding of the distribution of risk preferences in the population. And ideally we need a simple way of eliciting risk preferences that can be used in the lab or field. Charles Holt and Susan Laury set out one way of doing in this in their 2002 paper ' Risk aversion and incentive effects '. While plenty of other ways of measuring risk aversion have been devised over the years I think it is safe to say that the Holt and Laury approach is the most commonly used (as the near 4000 citations to their paper testifies).           The basic approach taken by Holt and Laury is to offer an individual 10 choices like those in the table below. For each of the 10 choices the individual has to go for option A or option B. Most people go for option A in choice 1. And everyone should go for option B in choice 10. At some point, therefore, we expect the...
Post a Comment
Read more

Nash bargaining solution

Following the tragic death of John Nash in May I thought it would be good to explain some of his main contributions to game theory. Where better to start than the Nash bargaining solution. This is surely one of the most beautiful results in game theory and was completely unprecedented. All the more remarkable that Nash came up with the idea at the start of his graduate studies!          The Nash solution is a 'solution' to a two-person bargaining problem . To illustrate, suppose we have Adam and Beth bargaining over how to split some surplus. If they fail to reach agreement they get payoffs €a and €b respectively. The pair (a, b) is called the disagreement point . If they agree then they can achieve any pair of payoffs within some set F of feasible payoff points . I'll give some examples later. For the problem to be interesting we need there to be some point (A, B) in F such that A > a and B > b. In...
Post a Comment
Read more