Saturday, October 18, 2008

(Palin Failin' at) Signaling Game

By now, in all economics graduate programs and some undergrad courses, students learn the Spence education signaling model. Michael Spence won the Nobel Prize a few years ago for this contribution. If students take an elective, they learn a little more advanced stuff about what might make a signal truly credible. Inspired by the Palin appearance on SNL, I'm going to adapt the interpretation of the signaling model to suggest why Sarah Palin just fell flat on her face

Suppose a voter does not know whether you're a lightweight or a heavyweight leader of great substance and judgement. Lightweights can do some of the things heavyweights can do - give speeches which are written for them for instance. But since speeches don't really separate out sheep from lions, voters might still be skeptical of a speech-giver.

So what's a real heavyweight to do? They should take a costly action or signal which,
(1) if the voter believed it came from a heavyweight would make voters more likely to vote for them relative to just giving the speeches AND
(2) this same action should be so costly for a lightweight that they prefer to keep on giving speeches.

This is the essence of a credible signal.

For example, you could on a foreign trip and meet with world leaders. There is big chance of falling on your face if you're a a pretender but a real heavyweight would be more likely to pull it off.

The problem with appearing on SNL and pretending to dance to a rap is that it fails condition (2). Obviously, total fluffheads can ham it up as well as if not better than serious leaders. SNL is useful for prominent politicians who are known to be smart but also want to prove they have sense of humor. If Gordon Brown could be funny on a comedy show, it would change his image so much for the better!

But Pailin?! We know she's an actress already. We need to know she's serious. Don't confuse SNL with Meet the Press. The fact that we can't imagine her on MTP proves what she is. And the fact that McCain chose her signals what a terrible decision maker he is and what a horrible President he would be.

(Apologies to Peggy Noonan for drawing on her article title.)

UPDATE: The NYT makes my point in an much more elegant way.

No comments: