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Singapore General Election 2015: Why Rational People Vote Irrationally

Opinions

Written by:

Jon

Singapore is headed to the Singapore General Election 2015 polls this Friday. For the first time since independence, we will see every single constituency contested.

Parties and politics have suddenly become the hottest conversation topic. Over a meetup with friends recently, we chatted about the PAP and the opposition candidates and who would be better option for Singapore. Friends whom I have always known to be apolitical are now taking an extremely keen interest in the hustling.

Despite differences in opinion, we have established some common ground. The PAP has done Singapore good over the past half century, we all grudgingly agreed. Out of all the parties, they have the most complete slate of candidates.

Interestingly, despite having no doubt about the ability of the ruling party, most of us at the supper table were reluctant about giving them our votes outright.

A couple of my friends went as far as to say that they are not going to vote for the PAP because they do not feel like it.

It gnawed at me. Is it not true that a General Election is about voting in the best people to run the country? And since we have more or less already established that the ‘best’ people to run the country are in fact the PAP why are we not giving them our votes without reservation?

To complicate things even more, my friends at supper are highly educated professionals who are counted on to make high level decisions for their companies and organisations. They are deemed to be rational citizens who ought to vote in the best interest of self and country. Is there something seriously wrong somewhere?

Thaler and Behavioural Finance

I found my answer in the works of Richard Thaler.

Thaler is a American economist and Professor at the University of Chicago Booth Graduate School of Business. He specialises in behavourial finance – using psychological principles to understand how people makes money decisions.

While especially important for finance, the applications are not limited to investing and money. At its core, behavioural finance examines how people makes decisions.

In his book – Misbehaving, The Making of Behavoural Economics, Thaler introduces two kinds of utility – Acquisition Utility and Transaction Utility. He explains them via the following experiment.

When is a beer more than a beer?

He asked participants to imagine that they are on a beach on a hot and sunny day. They have been longing for an ice cold beer for the past hour. Just then, they received a call from a friend saying he is able to bring back a beer from either a fancy resort hotel or a small rundown grocery stall down the road. The participants were then asked how much they were willing to pay for the beer.

Interestingly, participants who were told that the beer was from a resort hotel were willing to pay up to $7.25. Those who were told that the beer is from a street side stall were only willing to part with $4.10.

Now, a beer is a beer. If you are hot and thirsty, there should be no difference between how much you are willing to pay for a beer to be consumed on the beach. The origins of the beer should have no bearing on the ‘value’ you place on it

That is how rational people should think – they should be willing to give up in monetary terms up to what the perceived value of the beer is, no more and no less. That is in essence the Acquisition Utility of the beer.

Unfortunately, human beings do not always think that way. In making many decisions, human beings tend to stray away from the path of rationality. In this case, they also tend to weigh another aspect of the purchase – the perceived quality of the deal. This, according to Thaler, is what Transaction Utility is all about.

Paying seven bucks for a beer at a resort is annoying but expected. Paying that at anywhere else is an outrage!

He brings up another example – that of paying three times more for a sandwich at a sporting event versus what you would pay for the sandwich at lunch. The sandwich is fine, but the deal stinks.

Negative Transaction Utility

Based on Richard Thaler’s theory, I gained some insight into my friends’ thinking process.

From the ruling party, we get good (enough) clean (enough) governance. There is little doubt that policies are made with the country’s interest at heart. It is difficult to find another party that will do as well. The Acquisition Utility of voting for the ruling party is high.

On the other hand, it seems that the transaction utility of voting for the ruling party is highly negative. The deal is so bad that they are willing to forgo the better party for a lesser one because voting for the opposition makes them feel so much better. I suggest three reasons why this could be so.

Gerrymandering

In the 2011 General Elections, Workers Party candidate Yee Jenn Jong lost the Joo Chiat SMC by 388 votes to incumbent Charles Chong. Since then, he has done some good work on the ground and is poised to put up another good fight. That is, until the entire Joo Chiat SMC is to be merged with Marine Parade GRC in the coming GE. In one fell swoop, the effort Yee has put in over the past four years is now amounting to almost nothing.

The formation of Moulmein Kallang GRC in 2011 and the subsequent dissolution in 2015 seems baffling at first. It becomes less so when we realized that in 2011, Lui Tuck Yew is a rising political star without a GRC to helm and in 2015, an outgoing transport minister who will not be contesting in the coming GE.

I remembered in the previous two GEs the topic of gerrymandering is still a keenly debated one. Opposition candidates questioned the boundary changes furiously. In this latest GE, save for a few jibes here and there, there is little mention to this issue. The electorate had either grown more accepting or they have become resigned. I am going for the latter.

And it is this uneven playing field and the perceived unfairness that could lead to negative transaction utility when voting for the ruling party. Backing the ruling party becomes akin to backing the schoolyard bully – deemed a pariah if he loses and unsatisfying if he wins.

High Ministerial Salary

This issue has been flogged to death in parliament and in the online spaces, and I am not here to discuss the merits or demerits of it.

I understand the very practical considerations the government has in trying to attract and retain capable men and women to serve.

However, this does not detract from the fact that we have the highest paid politicians in the world. No one likes to pay the highest price in the world. You will want the cheapest and best, not the most expensive and ‘perhaps’ the best.

The very act of paying for the most expensive ‘something’ makes the transaction utility highly negative.

The Media

When I was in secondary three my English teacher made a remark about our press. She told us to take a closer look whenever we see pictures of opposition politicians in the Straits Times. They would always look combative and they would always have their mouths open, she said.

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Photo from ‘Today’ 6 Sept 2015 pg 10 – You will never see a PAP candidate looking like this

Till today, I would always do a double take at the photos. I cannot help but be amazed by how right she still is (it has gotten somewhat better though) after all these years. Many pictures are selected for opposition politicians to look anything but flattering.

What she did then was to expose me to the power of the media.

The implicit statement is this – to vote for the PAP means that we are compliant with the propaganda that the mainstream media is pushing out. It means that we cannot see through the veiled political messages disguised as news.

Voting for a party that has to resort to such ‘trickery’ only goes to show how much respect it has for the electorate as informed and intelligent thinking adults.

No one likes to be taken for a ride. In this instance, the transaction utility of voting for the ruling party goes into negative territory once again.

In conclusion

My friends could not explain why they are reluctant to vote the ruling party. They know that something is not right and that they do not feel good in voting a certain way, but they were unable to place it.

Through the principles of behavioural science, a simple explanation emerges. As much as we think we are voting with our heads, scrutinizing manifestos and weighing the candidates put forward meticulously, more often than not we are voting with our hearts. (We are exactly like that when it comes to investing!)

In the case of the ruling party, our heads tell us that the sandwich is fine, but our hearts says that the deal stinks.

image: channelnewsasia

21 thoughts on “Singapore General Election 2015: Why Rational People Vote Irrationally”

  1. Funny title. If ur decisions are not rational, then u are not a rational person. ‘Highly educated professional’ merely indicates that one is well learnt in a niche field/industry, nothing more. But yes, this is also why some professionals make terrible stock and investment decisions.

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  2. “From the ruling party, we get good (enough) clean (enough) governance. There is little doubt that policies are made with the country’s interest at heart. It is difficult to find another party that will do as well.”

    When you Assume, you make an ASS out of U and ME.

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  3. I notice those who are financially savvy, most tend to lean towards PAP. Perhaps they take a longer term and strategic view of the election, and PAP is also known quantity.

    Imagine the unimaginable: PAP withdraws itself completely from contesting in this election. Outcome: a coalition government of WP, SDP, SF, SPP etc.

    Like couples who are married for a long time, some may take their spouses for granted.

    We should take some time to deliberate carefully before casting our vote.

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  4. about the beer. my friend would not call. she will just get the beer from the cheaper stall. if there were no choice, the price would not have mattered. if there is a choice, yes, it matters.

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  5. Anon – i think what the author sought to analyse was exactly why usually rational people (and he used their education to support their thus-assumed intellectual capabilities) make such seemingly irrational decisions when it comes to politics.

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  6. Interestingly the theory does a good job explaining why a much larger and different group of voters would not vote for a particular candidate if they were standing under the SDP banner than if they were contesting under the PAP. Somehow being under the PAP or WP gives them an air of credibility, regardless of their qualifications.

    Ultimately it all boils down to the party whip. If it’s not lifted (which happens almost all the time), your MP regardless of how supremely qualified or outspoken will have to choice to vote for the bill the party leadership supports.

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  7. I prefer to use Kahneman’s concept of substitution to explain why your friends (and indeed the majority of the population) vote for the Opposition despite knowing that the PAP is more qualified to lead the country. They answer the question of “who is better qualified to lead the country” by substituting it with the easier question of “who do I like more”.

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    • Thanks joel, nice one. Kahneman works like a dream every time!

      The irony is this – people spend their entire week reading up on politicians and parties and their ideas and they think they are using their System 2 to decide and they are as righteous as hell about their choice. When in actual fact their System 1 has already pushed the easier question to the forefront and they are using all that information to answer the wrong question.

      Another one that is so screamingly obvious is the confirmation bias. Everybody is merely seeking information to support their already entrenched stand. (myself included).

      The idea of a right thinking rational man is almost an impossibility.

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  8. Why does the author only discuss the anti-PAP psyche? Cognitive AND confirmation biases exist on both sides of the argument.

    In fact, surprisingly, I often find alternative party supporters to be better informed on national policy, while incumbent supporters tend to dwell on municipal issues. Diversity is truly representative at campaign level – WP going to its roots and pushing for minimum wage, SDP Dr Tambyah pushing healthcare reform, even niche issues like single parenting are touched on by NSP Kervyn… List goes on.

    Why not start the conversation there? Is the MP’s primary role to take care of estate management issues, or are they the less than 1% of population able to vote on and propose new laws and policies? Sure we can discuss both, but let’s agree on priorities.

    To me, cleaner can hire/fire (and there’s a managing agent in between), but the voice in parliament is for next 5 years. Agreed? Then perhaps we should scrutinise the PAP manifesto versus alternative in your area BEFORE jumping to conclusions.

    Whitewashing the past 50 years as linear progression is a fallacy. There have been 3 PMs with 3 different leadership styles and vastly different results. LKY likes to credit himself with bringing us from third to first world. My question is post 1990, apart from COE, GST & ERP, what “progress” has been made? Maintaining status quo is NOT progress, and inheriting a good system is NOT a guarantee of future success.

    In closing, let’s be constructive rather than destructive. Alternatives aren’t terrorists, we’re all concerned Singaporeans, and we’re all in this together.

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  9. Irrational really exist in Singapore. Do you realize that Hougang SMC households had been paying one of the highest Service and Conservancy Charges since 2007 (it could be earlier but I can only find the record to 2007). Aljunied GRC as well now since the fees was raised in 2014 April.

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  10. Making the sweeping assumption that people voting for the opposition parties are voting irrationally – just because of a n=? survey of your friends who cannot explain why they would vote for the opposition – is equivalent to the assumption that people who are voting for the ruling party are brainwashed.

    While Thaler’s example is interesting, it has to be stretched to a – well, irrational – amount to cover the assumption you make.

    First of all, gerrymandering is serious – and only one of the less subtle ways the playing field is uneven both during and after elections. It denies voters the chance to check the incumbent, and is part of the bigger picture in the debate of whether there should be a balance between the ruling party and opposition ones in power (ignoring the various rights arguments). Not something that a rational person would dismiss.

    Secondly, perceiving the media to be biased also evokes more than just a nasty feeling and desire to run against the crowd. Media has, from time immemorial, played a hugely influential role in shaping the attitude of society. He who controls the media controls pretty damn much everything. Despotic countries beat, imprison and kill journalists who don’t conform, and in some countries the media is the government. Even in the UK, Murdoch’s hold over politicians from both parties was revealed to have been extensive. Remember how the Arab Spring started? Because people found the one source of mass media that “leaders” – now internationally recognized as tyrants and dictators – could not control.
    So the perception that the media is biased and controlled is not one that a rational person would dismiss, and not the way you have.

    High Ministerial Salary. Naturally, there are people who complain about this. I do agree that pay has to keep track with private sector pay – or that perhaps private sector pay should be limited, but that is a far more complex economic and public policy discussion – and no doubt some people aren’t happy about this. But I think the main source of discontent is that these highly paid individuals have not been seen to have done enough for those clinging on to the lowest rungs of society. This is not a socialist argument, but there have been undeniable changes in Singapore’s inequality structure that make it hard for even people to get an equal quality of education and then to get a high paying job. Worse of all, for the people at the bottom of the economic ladder, there is a terrible perception that they must be lazy or have done something wrong to be that poor. As a child and grandchild of such people who have woken up at 5 and worked harder than most of these office workers will have to in their lives, I strongly disagree. And to dismiss this group as a small minority or who “just want respect” shows blinding ignorance.

    Unfortunately, the only thing that can be taken away from your argument is that some pro-ruling party voters do vote irrationality, and not the converse.

    Ditto the other extreme arguments about how the opposition parties are going to overrun parliament. That’s just not going to happen, for a long time. There are incumbent ministers whom Singapore needs and will thus be voted in, and there are opposition candidates who have potential and could be voted in. And hopefully none of the truly irrational ones get voted in.

    Finally, there is another extreme idea that anyone entertaining the notion of having more opposition representation in parliament must be anti-ruling party. Stats please? I for one, don’t. I vigorously defend Singapore when some pig-headed, ignorant, self proclaimed “liberal” tells me “but it’s a dictatorship” and point out the many things missing from their country that Singapore, and other similarly governed asian countries have been able to implement, under the ruling party. They are no doubt competent, and are very clean in terms of corruption, although Singapore is very high up the ranks of cronyism, according to The Economist.

    But that should not make up for their failings in other ways, and the growing discontent over the years reflects that, not irrationality. The purpose of voting in opposition candidates is more to do with getting them to acknowledge and work on that, and perhaps getting them to realise that it is time to play fair in politics and win seats with a bit more dignity and respect from their opponents. The ruling party not having a majority or being a insignificant force in parliament is not going to happen for a long time – using such extreme examples is reflective of at best, scare tactics, and at worst, a shocking lack of rational thought.

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  11. To the men behind Big Fat Purse

    this is a financial blog, not political. I appreciate you express your political views elsewhere.

    please do not irritate PAP supporters like me with these articles.

    Thanks

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  12. Jon – You have written a very perceptive balanced article and if we have more Singaporeans like you we will have a bright future.

    The PAP would benefit from reading your analysis. Like you say they are the best we have and doing their best in the best interest of Singapore. Yet seemingly rational people cannot bring themselves to endorse them wholeheartedly. If you allow me to differ from the form but not the substance of your rationality theory I would put it down to not what the PAP is doing but to how they are doing it that puts people off.

    Take your point on high ministerial salary. Although we cannot not be envious of million dollar salaries deep down in our hearts we can accept we should pay our top political leaders well if they are doing a good job. But why has it been so difficult to sell this to Singaporeans. I know some of the Singaporeans who complain bitterly about ministerial pay are themselves top corporate executives earning millions in salary. But they feel the PAP government is pushing this policy down their throats and they never liked anyone pushing things down their throats. What if the PAP government, after all the debate and rational explanations, were to sincerely acknowledge this is an emotive issue not easy to convince people and then ask with due humility for the understanding and trust of the people that the PAP Government is doing it only because this is a critical element to get and retain good political leaders in a corrupt-free Singapore. To show good faith by incumbent ministers and to win the trust of the people all existing office holders will not benefit from the ministerial pay increase. Only future office holders after the pay increase is approved will stand to benefit. If this is too drastic or unfair to incumbents, then perhaps a modification like existing office holders will only get half the pay increase.

    Your other reason for generating “negative transactional utility” is that the PAP acts like the “schoolyard bully” against the opposition. I think GE15 is seeing much less of this and probably the PAP also understands better the power of the being the “underdog”. DPM Tharman is the best in being the “gentleman” politician explaining complex policy in a simple way and refuting opposition accusations in a calm and unthreatening manner. The opposition is comparatively weak and disadvantaged and there is no need to appear overbearing. I bet DPM Tharman will win his GRC by a landslide and likely by the highest margin of any PAP candidate.

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  13. The PAP shd me happy that there an enthusiastic Opposition at work , otherwise, they may have to revert to hiring clowns like Harban Singh to make a fool of themselves to put up a show that there is an Opposition in Singapore.

    The PAP must ask itself , WHAT HAPPENS IN THE POST LHL ERA?. What if the subsequent government is not as clean? What are the mechanisms available to correct such a situation , against a government which is so overwhelmingly powerful? . Singapore will fail spectacularly in such a circumstances. ( look at the LDP in Japan n KMT in ROC!)

    Cronyism n vested interest creeping in when a party has been in power for an extended period is agiven, in fact , this is already happenining.
    The only solution is a proper opposition to check n balance. GCT , by saying that PAP SELF CHECK, reveal that he is either naive or lying.

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  14. Hi Jon and bfp team,
    I am writing in to show support and tell you guys to keep up the excellent writing and never ever be discouraged by hate mail or worse – be intimidated by the trolls. For the pen is always mightier than the sword.
    All the best!

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    • Thanks for your kind words KH,

      For every mail that puts us down there are many more that sends across words of encouragement, yourself included. We very much appreciate that!

      I doubt it is the work of trolls. More so by very concerned citizens whom from where our writings struck a chord or a raw nerve. We appreciate all feedback because that is where we learn.

      We will press on. Thanks for dropping by!

      Reply

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