Stranger Things: The Role of Behavioural Economics in Political Elections

Stranger Things is a Netflix series set in the fictional rural town of Hawkins, Indiana, during the early 1980s. The nearby Hawkins National Laboratory ostensibly performs scientific experiments, but in reality secretly studies the paranormal and supernatural, including human test subjects. Inadvertently, they have created a portal to an alternate dimension, “the Upside Down”. The influence of the Upside Down starts to affect the unknowing residents of Hawkins in pernicious ways.

Somehow similarly to the awarded Duffer brothers’ fiction, stranger things happened in the real coal-mining town of Ebbw Vale, South Wales, in June 2016. The famous social network, Facebook, performs research on human emotions, and secretly feeds fake news into the users’ profiles. Advertently, Facebook created a portal to a fake dimension, whose influence starts to affect the unknowing residents of Ebbw Vale in pernicious ways. However, this fake dimension was only the first stage of Ebbw Vale’s “Upside Down”.

Until the 90s, Ebbw Vale was famous for its coal and steel; however, with globalization and advancing technology, coal mines and steelworks began to shut down, leaving the town devastated. In June 2016, Ebbw Vale was once again in the public eye, regaining its fame for reaching one of the highest “Leave” votes in the UK (62%). The reportage of Carole Cadwalladr, a Pulitzer Prize finalist, sparked further interest in the town and its inhabitants (see here). Cadwalladr investigated the reasons behind why the majority of the residents wanted to leave the EU. Some of the popular answers were the following: they wanted to take back control of their (public) money, immigrants were stealing their jobs, and the EU has done nothing for them. Paradoxically, among other things, she has found a newly-built £33MM college of further education, a £350MM sports centre, new roads, bridges, and railway stations – all funded by the EU! Even more, there were noticeable signs showing EU’s involvement in these projects (see below).

Besides, Ebbw Vale has one of the lowest immigration rates in the Country.
Stranger things.

According to the interviewees, the locals were getting their information discrediting the EU through Facebook.

A research made by Robert Epstein of the American Institute for Behavioural Research and Technology estimated that Google may be able to affect 25% of the votes worldwide through selectively informing users about a candidate’s positive or negative doings. Moreover, Epstein explains the power of the Search Engine Manipulation Effect (SEME), being able to move the preferences of an uncertain elector toward a candidate by simply tweaking the ranking algorithm of a search engine.

Interestingly, Cadwalladr discovered that a company called Cambridge Analytica – which has worked both for Trump and Brexit Campaigns – exploited a similar effect. It profiled people politically, in order to understand their individual fears, and consequently targeted voters more efficiently through Facebook ads. According to the Guardian, this was done illicitly by harvesting the profiles of 87 million people from Facebook. People’s fears were then fuelled by the related fake news appearing in their feed, an example of which can be seen below.

The above information is completely fake; there were certainly no discussions about Turkey joining the EU! Yet, the individuals who might have been afraid of losing their jobs or of seeing their wage drop, were likely paying much attention to this fake news.

According to Cadwalladr, the entire Brexit Referendum “took place in darkness, because it took place on Facebook”. For her, the “Upside Down” of Ebbw Vale (and respectively of Brexit) was Facebook.

However, the aim of this paper is not to blame high tech companies, nor is it to call for higher protection of personal data they possess. Indeed, they are not the main culprits. Instead, we should ask ourselves: why were We, and the citizens of Ebbw Vale blindly trusting in such fake news?

Behavioral Economics explains how irrational and limited the behaviour of an individual can be. According to R.H. Thaler, the human brain can be seen as a hardware, which involves 2 softwares: “System 1” and “System 2”. The former is fast, effortless, impulsive and used in everyday decisions, while the latter is slower, effortful, thoughtful and used in more complex and important decisions (just like an electoral choice is supposed to be, since it is going to affect the future of both the individual and the collectivity).

According to behavioral economists, human beings tend to minimize their effort, naturally causing frequent mistakes that are independent of the quantity of available information. Humans are often selectively unfocused, discharging information deemed unimportant, while preferring information that confirms existing beliefs (referred to as usually as cognitive dissonance).

In other words, by nature, people are ‘lazy’ and follow the law of exerting the least effort necessary, especially for topics they perceive to be far from them, such as politics. As a consequence, in politics, we can expect a variety of people to use the effortless System 1 way of thinking over the thoughtful System 2, thereby becoming “the lazy controller”, as referred to as by Kahneman.

Laziness leads to biases and heuristics. Biases are systematic and predictable errors, while heuristics are shortcuts that allow us to jump to adequate but imperfect answers to challenging questions. An example of a heuristic is the so-called alone effect, which causes an individual to form a full opinion of someone (or something) based on the judgement of his/her singular features. For instance, by acknowledging the entrepreneurial skills of a candidate, an individual may be led to consider this person to be skilled in politics as well, without paying adequate attention to the electoral program proposed.

So far, we have established that people are innately prone to some level of ‘laziness’, leading to the usage of mental shortcuts, i.e. heuristics and cognitive biases. As a result, the afore-mentioned System 1 becomes the predominant mode of behavior, in which even some of the most important decisions are delegated to a disproportionally fast and impulsive thinking. Indeed, people will blindly rely on short slogans, new titles, repeated messages, which, as explained above, are usually displayed ad-hoc on Facebook news feed. And although they are not always reliable news, System 1 mode of behavior will ultimately stymie people’s motivation, discouraging any further search for the truth.

Biases have been widely discussed by Dan Ariely, professor of behavioral economics at Duke University, in his famous book “Predictably Irrational”. Ariely asserts that consumers are irrational, which he demonstrated through several experiments. One of the experiments consisted of the following setup. A sample of consumers were given a choice between two sorts of pralines; the first (Lindt, $0.26) of a far higher quality than the second (Hershey, $0.1). Under these conditions, most consumers chose Lindt, the price-quality ratio of which was more attractive. However, by decreasing the price of both products by $0.1, thereby making Lindt pralines even more attractive in terms of price and Hershey pralines free, the number of consumers choosing Hershey more than doubled. This predictably irrational behavior can be explained through a feature of the Prospect Theory: the loss aversion. Loss aversion is a cognitive limitation which brings an individual to select the risk/loss free condition, instead of the rationally better choice (see more experiments from Ariely here).

A fundamental question is then: How can we expect individuals to make rational choices in political elections if they do not even act rationally when selecting pralines?

By applying the above experiment in the context of political elections, where a rational and sensible politician promises efficient public services with a fee, while another, less rational, promises free public services, Ariely’s experiment would suggest that the electorate would irrationally go for the second one.

The heart of the problem in political elections, the “Upside Down”, is not only fake news but also laziness, lack of serious and thoughtful reflection, and the tendency of System 1 to supersede System 2.