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  • Election Time: Voters need to know their Behavioral Biases before exercising their franchise

    April 7, 2014

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    I am no political commentator nor do I believe in giving political discourses to others. Being a student of Behavioral Science I have been keenly watching the ever changing political scenario in our country in view of the elections. There are a few biases I thought would help the voters to understand their own follies and make meaningful decisions. We have a mind and a heart. We are supposed to make decisions with our mind but when we get carried away by emotions we make decisions out of our heart. Such decisions may not be rational and in our best interest.

    Confirmation Bias:
    We are always guided by information that confirms to our point of view. We close ourselves to a different or a negative view. This deprives us of alternatives and skews our decision making. We may read a lot but we may not become knowledgable if we suffer from confirmation bias. If you are a hard core fan of a particular party you will be reading, watching, hearing, only the positives of that party. You will tend to discard any negatives. So although you have immense information you will not have a holistic picture. If you hate a particular party you are prone to gathering information that fits in with your line of thinking. As voters you need to have a holistic picture and be open to all ideas, especially the ones that are opposite to your line of thought.

    Representativeness Bias:
    We make decisions based on representativeness or follow certain fixed set of customs or stereo types. We have different constituencies and different parties will put different candidates. As voters we need to chose the right candidate for our constituency. However we get more guided by the party affiliation and tend to chose the wrong candidate. That is how we have allowed so many criminals to be our MLA’s and MP’s. A good candidate is not representative of a good party nor is a good party representative of a good candidate. The current propaganda of communalism and religious fundamentalism should not sway your judgement. A party which hasnever governed will have a clean track record. Does it mean that it is representative of clean and honest governance? Representative bias is at play. Don't be unduly influenced.

    Recency Bias:
    We make decisions based on the recent or the readily available information. With 24/7 news from different channels, debates, twitter, face book and others we have over load of information. This is bound to distract us and we will make decisions based on the most vividly and colourfully recently displayed information. The current exit polls are the most readily available information and if one has to recall, it would be the following: BJP wave, Congress sure to lose,Kejriwal’s popularity fast fading, Stock market going up, FII buying, Economy recovery on hand. This is no conclusion but voters are prone to be guided by such information. It would be foolish to reach to conclusions based on the recency effect.

    Anchoring Effect:
    Letting one piece of irrelevant information affect one’d decision making. We are more likely to get anchored to our own idea which leads to faulty decisions. The exit polls would act as a strong anchor although that information suffers from sample size neglect.

    Other strong anchor is:
    BJP to win the elections, economy to improve, all the ills of the economy will be solved and the stock markets are rejoicing and the FII’s are entering. Scams of various kinds have become strong anchors for the Congress party and is losing ground. 2002 riots is used as a strong anchor against the BJP. Remember the strong anchor of “India Shining”: BJP was sure to win but it lost.

    Voters need not get influenced by such anchors as these are all effects of the recency bias. Make informed decisions on what is good for the country.

    Framing Effects:
    Reacting differently to the same information depending on how it is presented.

    The following are the two statements;

    • Index surges to highest level in 7 years.
    • Index has not gone anywhere in 7 years.

    Both the statements are the same but the first statement has more impact. Depending upon how the information is presented will impact the decision making. Some of the framing effects doing the round and attracting attention are: The media’s presentation of rallies, Kejriwal and the muffler: frame of the aam aadmi, Modi and chaiwala: frame of the common hard working poor man, Kumar Vishwas taking on Rahul Gandhi: frame of the top politician and his claim to fame. Voters need to be aware of the framing traps.

    Risk Perception Bias: Attempting to eliminate one risk but exposing yourself to potentially more harmful risk. We have choices and we make decisions on the choices based on the risk profile of these choices. In so doing we are prone to take on more fatal risky decisions. The country is faced with a big decision. It is not about a party, a candidate, right wing or left wing, religion or a masjid or a mandir. It is all about eradicating poverty, providing jobs, improving the standard of living of the poor people, infrastructure development, providing basic amenities like housing, water and electricity etc. It is about governance and development.We all are against corruption. Do we want a party which wants to eradicate corruption but does not have experience to govern? Secularism or good governance and development? Coalition or a stable government ? Which of these is a bigger risk for our nation? Voters need to judge and not be swayed away by the talks and debates of the politicians.

    Being a part of the financial world I cannot but be tempted to talk on the risk perception bias related to the current markets. Today we have a host of offerings for tax free bonds yielding around 9% interest. They seem less risky. But if you do not want to be a victim of risk perception bias ten years from now, you must invest in equities.

    The original article could be seen here.
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