The myth of the rational donor? (model this)

by on November 5, 2012 at 5:48 am in Current Affairs, Political Science | Permalink

At first glance this may sound a little whacky, but perhaps the deeper question is why more donors are not like this?:

“I’m all mixed up between being a conservative and a liberal,” said Kurt Schoeneman, a grape grower from Northern California, who added that some of his friends thought he was “senile.” He had found himself seized by waves of enthusiasm, Mr. Schoeneman said — first for one candidate and then for the other.

“Some of these people, they just loathe Obama, and they’ll write something really nasty about him,” said Mr. Schoeneman, who has given checks to both candidates, most recently $100 to Mr. Romney in June and $100 to Mr. Obama in July. “And then something else will happen, and I’ll go give Romney some money.”

Charles Y. Chen, a salesman in Virginia, gave Mr. Romney $100 on the day of his convention speech in late August. But in September, Mr. Chen donated to Mr. Obama every few days, $50 here, $55 there. Then he switched again, giving Mr. Romney $50.

“I think the Republicans have better ideas on the economy and the Democrats have better ideas on social issues, immigrationand social justice,” Mr. Chen said in an interview. “Just like anything, both have something that they do great and something that they need to improve.”

Gretchen Davidson, a homemaker in Birmingham, a Detroit suburb, said she had gone to several events to hear different ideas and arguments. She gave $500 to Mr. Romney in early August and $1,500 to Mr. Obama in late September.

“You have friends that throw parties on each side, and honestly, I am someone in the middle that didn’t really know which way I was going,” Ms. Davidson said. “You try to sort of see what people are so excited about.”

These are not lobbyists who need to hedge their giving:

Mr. Bagchi gave $100 each to both candidates on Sept. 8, he said, because “they are doing good work for the country. And I want them to come together. So for that reason, I gave to them both.”

Mr. Bagchi said that while he usually gave equally to both candidates, he had recently responded to a particularly personal appeal from the Obama campaign.

“I have given a little more to Barack Obama because he and Michelle were celebrating their anniversary,” he said. “But on balance it was very equal.”

Tomasz Wegrzanowski November 5, 2012 at 5:58 am

Isn’t this precisely how all charities except GiveWell get funded? Based on emotions instead of any kind of rational calculation?

Claudia November 5, 2012 at 6:11 am

I saw a lot of rationality in the article. Aren’t moderates swell? Looks like a Nate Silver effect to me, or more likely people having played the odds for some time. A pain to model…heterogeneity, mixed strategies, and random shocks…but good to ponder.

Andrew' November 5, 2012 at 6:58 am

Moderates subscribe to the weak arguments strongly held approach.

I can see ending up as a moderate because you examine the issues and find the D’s to be wrong on half and the R’s to be wrong on half (this is how pragmatists also end up as libertarian) and they also tack moderate due to the median voter theorem so you don’t have to get too excited about how wrong they are. I don’t see ending up as moderate because you just assume each side is about half right (a la David Brooks description of moderate).

Claudia November 5, 2012 at 7:47 am

I think you mistyped the noun in your first sentence. Reads more accurately with “libertarians.” But seriously it doesn’t apply to the people in this piece. Maybe they have weak views weakly held, maybe they have strong views strongly held in opposing platforms.

Andrew' November 5, 2012 at 8:10 am

The last guy in the article thinks if he doesn’t give Obama money then the IRS will be used against him. I’m not sure he’s any crazier than the guy who is a professor of decision dynamics who thinks Romney and Obama (campaigns) are doing good work for the country!

Steven Kopits November 5, 2012 at 10:48 am

The divide between an individualistic (classically liberal) and (socially) conservative mindset is internal to the individual. It is the same split as principal-agent theory. Both of these tendencies show up in politics as a result: maximizing individual perogatives and maximizing social duty. There is no single optimal outcome. In any event, principal-agent theory can carry a lot of water on this topic.

The more interesting question is the positioning of egalitarians. I believe principal-agent theory positions them as subordinate social conservatives, ie, egalitarians (who are not anarchists) are looking for undermine both the established order (social conservatism) and classical liberalism (meritocracy) by arguing that both individual and group property rights are inappropriate for the allocation of social rewards (but not costs or risks). (And for this reason, you’ll never see them use cost/benefit analysis, only benefit analysis.) But they are not calling for the social order to collapse or for people to stop working real hard. They merely want to use different allocation methodologies for rewards in a socially conservative society. Because their position is fundamentally weak, they are by necessity more vocal. If you don’t have power, you havve to jawbone.

Anon. November 5, 2012 at 9:04 am

CEO’s appear to behave this way (http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1984387), so why not regular donors?

lords of lies November 5, 2012 at 10:20 am

studies have shown moderates are stupider than the political extremists or politically motivated of either side. my very casual observation of this in real life supports this notion. this doesn’t necessarily mean dumbness and irrationality are handmaidens, but that’s the way to bet.
also, i wouldn’t exactly call an asian guy donating money to obama because he’s perceived as being more pro-open borders the model of unemotional, moderate thinking. rational, maybe if you consider it rational to want more people like yourself and relatively fewer people not like yourself surrounding you.

Bill November 5, 2012 at 10:51 am

citation please to the alleged studies.

BC November 5, 2012 at 10:04 pm

Donating to both candidates is actually rational if one is undecided. A donation is not a vote for a candidate — donations do not (directly) count in determining the winner. A donation is financial assistance for the candidate *to make his case*, through hiring campaign staff, buying ads, etc. It’s in the undecided voter’s interest to help both candidates make their respective cases so that the undecided voter can choose between them. This is not too different from public financing of campaigns: we don’t hold some pre-campaign poll to determine which candidate tax payers favor and only give financing to that candidate. We give financing to both candidates so that they can each make their respective cases. The undecided voters’ donations are the private version of public financing.

Rahul November 5, 2012 at 6:36 am

Isn’t the effect of giving both candidates $100 the same as giving both $0? Why not choose the latter option?

Claudia November 5, 2012 at 6:46 am

Some people put their money where their mouth is. I seem to remember a recent discussion here about the merits of betting. What’s a zero dollar bet called? All said, the people in this profile are a rare but encouraging voter type. I’d argue the emotional (less rational) voter is the one who always casts a straight ticket ballot for the same party.

Brian Donohue November 5, 2012 at 8:29 am

No no no no no. $100 to each means $100 more of both- more radio commercials, tv ads, machinery, blah blah frickin’ blah. Unless you think moderates are all idiots, I don’t see how you think this reflects well on moderates or is encouraging in any way other than as a triumph of 21st century marketing. Because that’s what this country really needs- more and better marketing!

Andrew' November 5, 2012 at 8:58 am

They properly recognize third-parties, down-ballot candidates, and peace and quiet as a clear and present danger to the country.

mulp November 5, 2012 at 10:58 am

Isn’t more-money more-speech a virtue and shows true first amendment values?

Of course, one should also convert to Islam, Church of LDS, Catholicism, and be “born again”, as well as deny the existence of God.

Rahul November 5, 2012 at 10:24 am

Unless you were being sarcastic, I don’t see why this sort of voter is encouraging: Can you explain why?

anon November 5, 2012 at 8:14 am

Isn’t the effect of giving both candidates $100 the same as giving both $0? Why not choose the latter option?

Because they have more money than judgement?

dan1111 November 5, 2012 at 11:54 am

@Tomasz, not sure I understand your point. Sure, charities make emotional appeals, but it doesn’t follow that all or most charitable giving is based on emotions. And even emotion-driven giving is not equivalent to this situation. People don’t give money help the poor, then the next day decide they are against helping the poor.

Anon. November 5, 2012 at 6:09 am

But many (most?) donors really are like that: http://marginalrevolution.com/marginalrevolution/2012/02/why-is-there-so-little-money-in-politics.html

“In this paper, we argue that campaign contributions are not a form of policy-buying, but are rather a form of political participation and consumption. We summarize the data on campaign spending, and show through our descriptive statistics and our econometric analysis that individuals, not special interests, are the main source of campaign contributions. Moreover, we demonstrate that campaign giving is a normal good, dependent upon income, and campaign contributions as a percent of GDP have not risen appreciably in over 100 years – if anything, they have probably fallen. We then show that only one in four studies from the previous literature support the popular notion that contributions buy legislators’ votes. Finally, we illustrate that when one controls for unobserved constituent and legislator effects, there is little relationship between money and legislator votes. Thus, the question is not why there is so little money [in] politics, but rather why organized interests give at all. We conclude by offering potential answers to this question.”

dan1111 November 5, 2012 at 12:04 pm

This is too clever by half. The stated motive for most political giving is not to “buy legislators’ votes” but to help elect the candidate that most supports one’s own views. Donating money to a candidate certainly does help that candidate get elected, so donors are exerting influence. All this conclusion shows is that the influence does not take the sinister form of “buying votes.”

W.E. Heasley November 5, 2012 at 6:31 am

The undecided voter, in the main, generally sides with the new comer more times than the incumbent. Hence the phenomena described above may well be a description, a peak-into if you will, of the action phase of reaching the point of breaking for the new comer more times than not.

Emanuele November 5, 2012 at 7:15 am

It is easy to model.
They do not have preference among the candidates;
They do care about political commercials and events. They want to attend more events and they want the president decided by the clever commercial campaign, and they are founding those.

Commercial geeks. I bet they love Mad Men.

anon November 5, 2012 at 7:45 am

+1

I would not be surprised if the “homemaker in Birmingham, a Detroit suburb” who gave $2000 split between the D and the R had a monthly cable bill in excess of $150.

The show must go on!

Mitch Berkson November 5, 2012 at 8:46 am

And without a DVR so she’s still watching commercials!

Brett Keller November 5, 2012 at 7:48 am

It makes sense if there are two motivations for donating: a) feelings of satisfaction, and b) expectations of changing the outcome. For small donors the feelings of satisfaction are much more important than their expectations of changing the race. Maybe they feel pleased with their donation because of patriotic, civic, or charitable feelings? Regardless, this satisfaction reward/payoff is a relatively stronger slice of the motivational pie for them compared to expectations of changing the outcome in part because they are smaller donors. Larger donors — truly partisan ones, not referring to those who are hedging their bets to get preferential policies regardless of who wins — are motivated more by expectation of changing the outcome because a) they get less per-dollar satisfaction out of donating because they value individual dollars less, and because they have a greater expectation of having an impact on the outcome (because their donations are larger).

Now if large donors (who aren’t hedging their bets for policy reasons) are also donating to both sides, *that* would be confusing…

dan1111 November 5, 2012 at 12:13 pm

Maybe so, but for me the feeling of satisfaction would be overwhelmed with the feelings of “wow, what an idiot I was to support Romney, then change my mind and support Obama, then change my mind and support Romney, when I really should have been supporting Obama all along!”

I tend to think of it more as an extreme way of showing everyone how moderate (and hence reasonable) you are. The normal way of doing this is to say “I don’t like either candidate”, but that is not very distinctive and is also quite negative.

mw November 5, 2012 at 8:19 am

That’s easy. Match it up with each time Mitt announced a new policy position.

Eddie November 5, 2012 at 12:35 pm

Haha! +1

Careless November 5, 2012 at 8:50 am

I’m reminded of Carnahan winning a Senate seat because he had recently died.

dearieme November 5, 2012 at 8:51 am

What you seek is the “more money than sense” model.

DougT November 5, 2012 at 10:38 am

That’s “more dollars than cents.”

Bill November 5, 2012 at 10:54 am

Is this any different than the Las Vegas gambling owner who gave millions to Newt, and then gave millions to Mitt.

Is the inconsistency of the above article only because it involves different parties, when there are greater differences within parties and primary candidates, sometimes, than between parties.

dan1111 November 5, 2012 at 12:20 pm

It is perfectly rational to support your preferred candidate in the primary, then your party’s eventual nominee. It could even be rational to support primary candidates in both parties. If you have a given goal (in your example, elect as conservative a president as possible), you could exert influence in multiple places in order to achieve that goal.

The difference is that the primaries are not a zero sum game like the general election.

Saturos November 5, 2012 at 11:43 am

They are all supporting the public good of democratic campaigns. They agree that the system is designed for two parties, and so ignore the others.

Luis Pedro Coelho November 5, 2012 at 11:49 am

I don’t think this is as irrational as portrayed.

If I donated 1 million to Rs every time Mitt Romney lays off the Southern conservatism on social issues and 1 million to Ds every time Obama went to the centre on economics; then I’d be moving both candidates in my direction.

(If you don’t have 1 million, go Kantian and say “I will do what I wished millions of other would do” and donate $100).

If you always donate to your candidate in the same amount, you will have no impact on what his policies, only on whether he wins. If you want change, you’re better off trying to move the centre of discussion and not caring so much about who wins.

Klaus November 5, 2012 at 3:12 pm

What will be interesting is the future where you will have various ethnicities whose origin lies in third world vying for the crumbs remaining of the former USA.

DKN November 5, 2012 at 4:53 pm
Alan November 5, 2012 at 9:18 pm

Many libertarians have little contact with, or comprehension of, normal people.

Thor November 5, 2012 at 10:28 pm

Meh. Some days I’m good to the missus, and some days I’m good to the mistress.

Rick Weber November 6, 2012 at 5:37 pm

Maybe it’s the (rationally) irational belief that supporting a political candidate makes the world better off even if they lose. i.e. High school civics classes have clearly destroyed these people’s minds…

Rick Weber November 7, 2012 at 10:46 am

Mencken: “The business of victimizing them [the American electorate] is a lucrative profession… The adept practitioner is not only rewarded; he is also thanked.” (pp. 86-7, Notes on Democracy).

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