The new science of evolutionary economics explains why some candidates, like some products, get ahead in the marketplace
By Michael Shermer
As the presidential candidates bounce from primary to primary, with some surging and others falling back, it is appropriate to ask if there is something going on here more than simply political preferences and perceived positions on issues. There is. In my latest book, The Mind of the Market, I discuss a phenomenon called the Matthew Effect. It is a disturbing disruption of what we think of as democratic fairness. Here's how it works.
In Jesus' Parable of the Talents, recounted in Matthew 25:14-29, the gospel author recalls the messiah as saying in the final verse: "For to everyone who has, more shall be given, and he will have an abundance; but from the one who does not have, even what he does have shall be taken away." Out of context this hardly sounds like the wisdom of the prophet who proclaimed that the meek shall inherit the earth, but in context, Jesus' point was that properly investing one's money (as measured in "talents") generates even more wealth. The servant who was given five talents invested it and gave his master ten talents in return. The servant who was given two talents invested it and gave his master four talents in return. But the servant who was given one talent buried it in the ground and gave his master back just the one talent. The master then ordered his risk-averse servant to give the one talent to the servant who had doubled his investment of five talents, and so he who earned the most was rewarded with even more. And thus it is that the rich get richer.
Jesus probably had in mind something more than an economic allegory about selecting the right investment tool for your money, but the story is a parable about how people and products can gain an unfair advantage in the marketplace. In the 1960s, the sociologist of science Robert K. Merton conducted an extensive study of how scientific ideas are discovered and credited in the marketplace of ideas and discovered that eminent scientists typically receive more credit than they deserve simply by dint of having a big name, while their junior colleagues and graduate students, who usually do most of the work, go largely unnoticed. A similar well-known effect can be seen in how both innovative ideas and clever quotes gravitate up and are given credit to the most famous person associated with them.
Merton called this the Matthew Effect. Marketers know it as Cumulative Advantage. Once a product gets a head-start in sales it signals to consumers that other people want that product and therefore it must be good, thereby causing them to desire it as well, which leads even more people to purchase the product, sending more signals to other consumers that they too must have it, and so it climbs up the bestseller list. Everyone in business knows about the effect, which is why authors and publishers, for example, try so fervently to land their book on the New York Times bestseller list. Once you are on the list bookstores move your title to the "bestseller" bookcase (sometimes even labeled "New York Times Bestseller List") and to the front of the store where copies of the book are stacked like cordwood. This sends a signal to potential book buyers entering the store that this must be a good read, triggering an increase in sales that gets reported to the New York Times book review editors, who bump the title up the list, sending another signal to bookstore buyers to order even more copies, which secures the title more time in the bestseller list that increases sales even further, and round and round the feedback loop goes as the richest authors get even richer.
To find out if the Bestseller Effect is real, the Columbia University sociologist Duncan Watts and his collaborators Matthew Salganik and Peter Dodds tested it in a Web-based experiment in which 14,000 participants registered at a Web site where they had the opportunity to listen to, rate, and download songs by unknown bands. One group of registrants were only given the names of the songs and bands, while a second group of registrants were also shown how many times the song had been downloaded. The researchers called this the "social influence" condition, because they wanted to know if seeing how many people had downloaded a song would influence subjects' decision on whether or not to download it. Predictably, the Web participants in the social influence condition were influenced by the download rate figures: songs with a higher download number were more likely to be downloaded by new participants, whereas subjects in the independent group who saw no download rates, revealed dramatically different song preferences. This is not to deny that the quality of a song or a book or any other product does not matter. Of course it does, and this too is measurable. But it turns out that subjective consumer preferences grounded in relative rankings by other consumers can and often does wash out the effects of more objective ratings of product quality.
Markets that traffic in rankings, ratings, and bestseller lists seem to operate on their own volition, seemingly beyond the control of the forces within. Thinking of the political landscape as a market and the candidates as competing products, we can see how polls and media coverage confer the Matthew Effect upon certain candidates, thereby shifting voter preferences and loyalties like so many brands in the supermarket. The moment Barack Obama won the Iowa caucus the Matthew Effect kicked into high gear, generating immediate media attention, driving political pundits to shift their focus, and creating a positive feedback loop in which the media-rich candidate got even richer.
So in addition to the actual value of a political product, our shifting brand political preferences often have more to do with this peculiar social phenomenon than it does what we like to think of as democratic fairness.
Michael Shermer is the Publisher of Skeptic magazine, a monthly columnist for Scientific American, an adjunct professor of economics at Claremont Graduate University, and the author of the just released book, The Mind of the Market: Compassionate Apes, Competitive Humans, and Lessons from Evolutionary Economics (Times Books).
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