Overconfidence in Political Behavior

Abstract

Without heterogeneity in ideology-preferences and opinions over political actions-there would be little need for the institutions studied by political economists.1 However, the sources of ideology have received scant attention: since Marx, political economists have largely viewed ideology as driven by wealth or income-despite the fact that these variables explain little of the variation in ideology ( This paper proposes a complementary theory in which differences in ideology are also due to imperfect information processing. This theory predicts that overconfidence in one's own beliefs leads to ideological extremeness, increased voter 1 Without heterogeneity, institutions will still be useful for coordination (Weingast 1997). Traditionally, opinions have not been considered part of ideology; however, recent work has provided compelling arguments that ideology should include some beliefs (McMurray 2013a, b).

Electoral Competition with Rationally Inattentive Voters

“…For the same reason, in a one-dimensional conflict, voters in the middle of the ideological divide will be less informed than those at the extremes (given the same cost of information), because they expect the policy to be about right from their perspective. This is consistent with evidence on US survey data: first, voters with more extreme policy preferences choose to pay more attention to the media (blogs, TV, radio and newspapers) - Ortoleva and Snowberg (2015); second, they are also more informed about the policy positions of presidential candidates - Palfrey and Poole (1987).…”

Mindful Economics: The Production, Consumption, and Value of Beliefs

“…In large representative US surveys, Oliver and Wood (2014) similarly find that while education is negatively associated with belief in political conspiracies, political knowledge and interest are not. Ortoleva and Snowberg (2015a) find that overconfidence (about current and future inflation and unemployment) is uncorrelated with education or income and increases systematically with media exposure, age, and partisanship.…”

“…The study finds that: i) more overconfident agents have more extreme political views, and higher turnout rates in elections (thus cognitive distortions really matter); ii) overconfidence does not decrease with education, and it increases with both age and media exposure (polarization); and iii) it is found both on the Left and the Right of the political spectrum, though since 1980 more so on the Right. To explain these findings, Ortoleva and Snowberg (2015a) propose that voters suffer from heterogeneous degrees of "correlational neglect"-that is, they fail to take account that the observations they derive from their local environment, social network, and chosen information sources are largely redundant.…”

Are conservatives overconfident?

“…Our own recent work seems to add to this general trend, finding that conservatives are more overconfident in a large, representative U.S. survey (Ortoleva and Snowberg, 2015).…”

“…In this paper we generalize the model of Ortoleva and Snowberg (2015) to allow this parameter to vary over time, and investigate the implications of that generalization for the relationship between overconfidence and ideology (in Sections 2 and 4). This generalization introduces the concept of a political zeitgeist-a prevailing set of political beliefs in a period that shape people who live through that period.…”