Situational Gamblers: Prospect Theory and the Commonalities of Presidential Campaign Management
The general responses of presidential campaigns to challenges and moments of great risk can seem haphazard; decision-making may appear to depend entirely on the character of the specific candidate and campaign. But as a scholar at Columbia University argues in a 2011 study, “presidential campaign management is potentially far more predictable than it at first appears.”
The study, published in Presidential Studies Quarterly, “Situational Gamblers: Prospect Theory and the Commonalities of Presidential Campaign Management,” analyzes key strategic decisions by Jimmy Carter, Edward Kennedy, Ronald Reagan, and George H.W. Bush during the 1980 campaign. The study’s author uses the lens of “prospect theory” — the well-documented psychological phenomenon that people will take huge risks to avoid losses but will “refuse to run those very same risks in order to make equal gains.” Of course, the author allows, studying a single campaign does not “prove prospect theory’s suitability as an explanation for all presidential campaign decision making,” but it does underscore the usefulness of an “underutilized tool” in explaining campaign behavior.
The study’s findings include:
- A study of decisions among the candidates — from Kennedy’s decision to address questions about his personal life and fitness for office with a national interview, to Reagan’s stunning loss in Iowa and his decision to open up his campaign — shows the power of prospect theory to explain how campaigns are managed. This means that when facing losses — even with a primary nomination virtually already secured — candidates often can be “expected to exhibit risk-seeking behavior irrespective of their overall standing.” Likewise, when presented with the opportunity for large and crucial gains, campaigns will often puzzlingly demur and not take risks.
- “In each case studied, the net assets would suggest either moderately cautious campaign management (Kennedy at the end of 1979, Reagan between Iowa and New Hampshire, and Carter between New York and Pennsylvania) or active risk taking (Carter in late 1979 and early 1980, Bush between Iowa and New Hampshire, and Kennedy between New York and Pennsylvania). In fact, the results consistently have been the opposite as the candidates have instead responded to recent events, to marginal changes from their status quo. At once, this observation is precisely what makes each of these junctures a puzzle, but also exactly why prospect theory helps make sense of them.”
- Looking at a subsequent election, Barack Obama’s decision to give his Philadelphia speech on race also tentatively seems to conform to this pattern: “Prospect theory might also have a suitable explanation for why Obama chose to make a risky speech on race: he was in the domain of losses. Fresh off disappointing defeats in Ohio and Texas, and trailing in upcoming Pennsylvania, Obama found himself in almost exactly the same position as Carter in March 1980. The senator held an insurmountable delegate lead, but he was worried about the potential for a series of losses that could cost him the support of the party leaders whose backing he needed to win the nomination.”
The author concludes, “This study offers reason to believe that campaigns are mostly situational gamblers, accepting risks when confronted with current or anticipated losses but avoiding them when facing current or anticipated gains, regardless of their overall standing. That last part is a crucial insight. Who is winning or losing in the big picture might not matter as much as, rationally speaking, it should.”
Tags: presidency, Iowa, New Hampshire
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