Political scientists usually conclude that voters dislike negative campaign ads,
ID: 1118473 • Letter: P
Question
Political scientists usually conclude that voters dislike negative campaign ads, but we can use game theory to offer an explanation for why they continue to be used. While negative ads are (nauseatingly) commonplace in electoral competition, they are far less frequent in business competition; i.e., it is rare to see company A directly attacking the quality or character of competing company B to the extent that political candidate X attacks political candidate Y. (We might see a company talk about the insufficiencies of “the leading brand,” but the negativity is very tame compared to what happens during campaign season.) How might game theory also offer an explanation for this behavior?
Select one:
a. Political campaigns are sequential games, but business decisions are simultaneous games. Politicians deduce backwards from the conclusion of an election that the harm (in the form of lost votes) from using negative ads earlier in the campaign is less than the harm from not using them, so there is a first-mover advantage. Businesses, though, are unable to deduce backwards from their quarterly earnings report given that the decisions are simultaneous, and so are unable to conclude that negative commercials would be beneficial.
b. Political candidates find it much harder to form cartels since cheating (e.g., running negative ads against others) is relatively easy and successful in terms of gaining votes. The payoffs to cheating are also large since it means gaining office for many years. Businesses, however, usually are much less likely to form cartels since it is illegal to cheat and run negative commercials against other companies. Running a negative commercial is not a dominant strategy for a business like it is for a politician.
c. This is an example of a prisoners' dilemma where political campaigns actually are achieving the optimal outcome by using negative ads, but businesses behave in a less-than-optimal way by not using them. Using the example of successful negative campaign ads, businesses could likewise be successful using negative ads in the aggregate (i.e., all companies would benefit if all went negative) but a single company would not be successful if it was the only one that went negative.
d. Political campaigns only offer voters one decision every few years (or even less frequently if a candidate loses or chooses not to run again); thus, there is a much smaller chance that voters will punish a successful candidate who used negative ads in a one-shot campaign. However, purchase decisions are made every day and repeatedly, so consumers have much more opportunity to punish negative companies in this type of repeated game.
Explanation / Answer
Answer : a. Political campaigns are sequential games, but business decisions are simultaneous games. Politicians deduce backwards from the conclusion of an election that the harm (in the form of lost votes) from using negative ads earlier in the campaign is less than the harm from not using them, so there is a first-mover advantage. Businesses, though, are unable to deduce backwards from their quarterly earnings report given that the decisions are simultaneous, and so are unable to conclude that negative commercials would be beneficial. Because negative campaign ads are common place of electoral competition and there is rare to see that candidate A attacks candidate B.