Preparing for QE1 Politics and Psychology

1. Preparing for QE1 Politics and Psychology Richard C. Johnson May 3, 2006

2. Outline • Review of Key Politics and Psychology Concepts • Application of Concepts to 2002 QE1 on ANWR Drilling • Questions and Comments

3. Reminder – Come in with a Plan • The background materials will give you a good idea of what the topic will be • Worthwhile to ponder likely questions • For example, poll related question in psychology, interests/coalition question in politics • Use reading day to map key isuses out in your mind and on paper

4. Know Your Strengths and Structure Your Time • Richard’s suggestions (by no means the only way to go) • Start with statistics: often reveals key information for other sections • Move to politics and psych: if you put off until the end, you may run out of time to answer completely • Spend the afternoon wracking your brain on economics

5. Key Politics Concepts • The Four “I”s • Interests • Electoral, policy, moral? • Institutions • Senate rules (filibuster), bureaucracy, culture • Ideology • Personal beliefs, partisanship • Information • Does complete information exist? Sources?

6. Other Things to Remember • Role of leadership • Bureaucracy – turf wars, culture • “Markets vs. Governments” • Elections and Electoral Politics • Types of Interest Groups – strength and importance

7. Identify Key Interest Groups and Coalitions • Background material should provide sufficient info on issue • Explain both sides of issue • Identify groups associated with pro and con, describe “winners” and “losers” • Note relative strengths of each group and connection to your policymaker • Point out “strange bedfellows” and potential divisions in policymaker’s base constituency

8. Making a Recommendation • Does the question ask for a policy recommendation? • Be CLEAR and SPECIFIC • Moderation is usually best • Explain why recommendation is best from both a policy and political perspective

9. Second Question – IR? • Again, key info from background materials • Realism vs. liberalism • Multilateral vs. unilateral • Role of domestic public opinion in international relations

10. Key Psychology Concepts • “Power of the Situation” • Prospect Theory • Valuing losses greater than gains • Framing • Bounded Rationality • Discounting (Myopia) • Biases and Heuristics • E.g. availability, representative, anchoring

11. More Psych Concepts • Status Quo Biases • Uncertainty • Choices • Procedural Justice • “Groupthink” – social proof • Influence • Social diffusion • Channel factors • Personal endorsements/credibility/authority

12. Polling Methodology Question • Q: What do poll results tell us about attitudes toward policy? • A: How is the question framed? • Is there information in the question that could affect the response? • Availability heuristic, choices • A: Is the issue salient? Do people have strong opinions?

13. Polling Methodology Question • A: What is the sample makeup? Are different polls using different samples? • How is issue framed? • As a loss • As a gain • What is more effective?

14. Framing/Implementation Question • Prospect theory – loss aversion • Weighting losses more than gains • Framing as loss more effective • Status quo bias • What is the anchor?

15. Framing/Implementation Question • Myopia/Discounting • Do people really think long term or short term? • How can you influence people to make good decisions in the long term based on short term effects? • Group Dynamics? • Social Diffusion • Channel Factors • Procedural Justice

16. 2002 QE1 – Politics (#8) • “unusual coalitions” • Pro: conservatives, GOP, Alaskans, oil/gas companies, auto industry, • Role of organized labor • “strange bedfellows” effect • Mixed depending on union • Con: Dems, travel industry, enrivos

17. 2002 QE1 – Politics (#8) • “Congressional elections” • Democrats • Dems will link to special interests (Enron) • Focus on negative enviro impact • Labor split will hurt Dems • Republicans • Focus on national security • Gas prices • Job Creation • Diffused impact – stronger in some areas/races than others • Current events could impact (MidEast, gas prices)

18. 2001 QE1 – Politics (#7) • Mostly from background readings • 1970s MidEast is not today’s MidEast • US imports more diverse (Russia/Canada) • Not as wealthy, need to maintain domestic stability • Domestic opinion in Arab states • More complex that Khalilzad implies in transcript

19. 2002 QE1 – Psych (#5) • Earlier NYT poll had more with knowledge of ANWR than later Gallup poll • Suggests weak interests or knowledge • NYT poll references “conservation” • NYT has more opposed to drilling • Gallup, more neutral, shows support but also lack of knowledge • Implies answer based on framing of question • “Hard to tell exact attitudes from polls”

20. 2002 QE1 – Psych (#5) • Status quo bias • Could emphasize that oil was eventually going to be drilled (loss less severe) • “Cost” of not drilling is increased gas prices, market and political instability • National security could worsen • Group dynamics – identify with supportive Alaskans

21. 2002 QE1 – Psych (#6) • People heavily discount future • Out-of-pocket costs of fuel efficient car deter purchase in short run despite long term benefits • Overcome this by: • Using personal accounts • Social diffusion/group solidarity • Make impact immediate (HOV lane?) • Personal endorsements/authority figure

22. Good luck! Questions?