Posted by
Ed Lilly on Sunday, March 16, 2008 9:15:50 AM
I’m guessing Eliot Spitzer and Bill Clinton, among others, would be none too happy to have the behavioral economics research described in “Predictably Irrational: The Hidden Forces That Shape Our Decisions” applied to their behavior while in office. From the book review:
Take Ariely's unusual experiment on sexual arousal. A group of 20-something male college students were asked to predict how they would answer a set of questions about sexual attitudes and behavior when sexually aroused. They were asked the same questions twice -- first in a “cold, rational” state, and again while they were viewing pornography Web sites.
No Difference?
“If we know ourselves, then there should be no difference between those two conditions, but as the results show, we don't really know ourselves. In a cold state, people thought they would always respect women, always use condoms and their sexual preferences were rather conservative,” Ariely said. Once they were aroused, their answers changed dramatically -- a willingness to engage in risky activities replaced normal caution.
So what does this have to do with economics?
“Imagine a stockbroker, who is at a particular moment making a lot of money or losing a lot of money,” Ariely said. “He's gripped by emotion. Is he going to make the same decision as he would in a cold, rational state?”
Or imagine an elected official, who is at a particular moment faced with making a decision about national security. He's gripped by ... emotion (wink wink). Is he going to make the same decision as he would in a cold, rational state? Interestingly, perhaps Richard Miniter's musings on Pajamas Media approach this issue on the Spitzer drama. Here’s his post in full:
As usual, the press took the easy way out of the Spitzer-sex scandal. They wore out their shoe leather finding out who the poor girl was servicing the New York governor. The New York Times stooped for the scoop.
The less-sexy, more important angle is: Who was paying for these $1,300-hour services?
The common assumption is that Spitzer himself paid. And maybe he did. But it seems unlikely. He is not personally wealthy (unlike his father) and, indeed, got into some trouble for apparently violating campaign finance rules for borrowing from his father for his campaign.
If Spitzer did not pay, who did? Now things become interesting. What if the tab was paid by a lobbyist? What, ahem, favor was expected in return? Did Spitzer give it to him?
And what if the favor-seeker was not an American citizen or represented a non-American interest? What if we represented say Chinese intelligence? Or the Saudis, who are well-known to pay for services at the “Emperors Club VIP” and other call-girl services? What did they want?
One thing that might interest the Saudis is the work of the New York Police Department’s elite counter-terrorism division. They might be interested in burying intelligence linking a prince’s unfortunate donation to an Islamic charity.
The possibilities are endless and the question is worth answering: Mr. Spitzer who paid your bill at the Emperor’s Club?