Did Overconfidence Cost Hillary Clinton the 2016 Election?
In explaining her 2016 loss, Hillary Clinton has said that “I was the victim of a very broad assumption that I was going to win.” Is there any truth in this?
My latest piece in Campaigns and Elections looks at this question. Here’s how it likely influenced her decision making:
[…] human beings are cognitively hardwired to be loss averse. We don’t treat prospective gains and losses the same way. When presented with a gain and a loss of equal value, say, a win or loss of $100, the loss feels worse that the gain, sometimes a great deal worse. One of the many consequences that flows from this fundamental fact of human psychology is the notion that you should play it safe when youâ€™re ahead.
Clinton spent virtually the entire campaign ahead in the polls, believing her election victory (a prospective gain) to be nearly certain. This would have put Clinton and her campaign â€“ already known for a cautious and methodical disposition â€“ into an even more guarded and risk-averse mindset, focused on preserving her lead. These restrained qualities were even marketed as a selling point against Clinton’s erratic and unstable opponent.
An expectation of victory and the behavior that stemmed from it is, in my view, one of many factors that hurt her campaign. But I would take issue with Clinton’s choice of the word “victim.” If she’s a victim of the psychology of loss aversion, then so is every human being ever born who’s lived to be old enough to make decisions. Loss aversion is a universal feature of human psychology and behavior, one that is extremely familiar to most economists, psychologists and marketers. It is regrettable that so many political candidates and strategists remain oblivious to its power.
All human beings have biases — lots of them. If we’re going to make good strategic decisions, we have to be aware of what those biases are and how they might affect our choices. That’s why the article suggests how political strategists might compensate or correct for the innate biases we all have around risk.