Using Two-Tiered Canvassing to Generate Support Where There Previously Was None

In Influence: The Psychology of Persuasion by Professor Robert Cialdini, the author identifies how someone attempting to exert influence over another person can do so by getting said person to identify with a certain idea or group prior to the actual meat of the requested action.  In the book, the particular example involved the difference in agreement rates for putting up a massive "be safe and wear seat belts" sign in the person's front yard.  What was noted was people had dramatically higher rates of saying "yes" to the absurd sign in their front yard if they had previously been approached by a canvassing team asking them to sign a list that they felt seat belts should be worn for safety.

Are you anti-safety?

Signing the petition seemed pretty innocuous, and most people would not be too opposed to identifying as pro-seat belt and pro-safety.  With this simple action, however, those who signed in their minds began to identify with this cause and began to see themselves as agents for it.  Because of this decision and the personal identification which took place afterwards, the second request did not seem terribly ridiculous.  When approached and asked if they would put this sign up in their front yard, those asked did the mental equation of "I'm in favor of safety" and because of it were much more likely to agree to the large sign.

How This Can be Applied

With the California prop voting coming up in November, there are several special interest groups that will be trying to garner popular support for their proposition going in to the voting process.  For the sake of conversation, let us look at one of the the most polemic of these propositions: legalizing marijuana (Proposition 19).

Now how could Cialdini's identified phenomena be used to actually make the public more favorable to this proposition?  One methodology would be to first approach potential voters in a canvassing effort and request that they sign a pro-free choice or pro-freedom petition.  Reasons given for the request could be that the group is trying to help the people show the government that they feel that citizens should have the ability to make free choices without government interference.

Presumably, with this decision to sign the seemingly innocent "pro-freedom" petition,  individuals approached would be linking themselves in their minds to being pro-free choice and as agents for this cause.

When approached, ideally the next weekend, by another canvassing group asking them to sign a petition saying that they feel people should have the right to choose whether to smoke marijuana on their own without government interference, the suggestion should be couched in terms of freedom and personal choice.  The jump could potentially be too large for many to make, between "freedom" supporter and "freedom to smoke marijuana" supporter, but I would guess that one would receive much more positive responses to the second request after the initial one.

The Approach Can be Two-Sided

Continuing with the marijuana proposition, opponents to prop 19 could have a two-tiered canvassing approach of first approaching potential voters and asking them to sign an "anti-drugs" petition.  This seems incredibly innocent and simple, and I would be surprised if there was too much resistance to it.

By signing the petition, individuals would be creating a link in their minds between themselves and the anti-drug cause.  This could be exploited in a proceeding canvassing effort with the petition to be anti-legalized marijuana.

Why Do People Need to Sign Something?

One of the important items in Cialdini's book is the associative significance of signing your name, and even better, if your position is to be visible by other members of your community.  While simple, the act of signing your name creates a very strong link in your mind, much stronger than a simple verbal 'yes' or 'no'.

While it involves more time and resources, the two-staged canvassing process can be used to create supporters where there were previously none.

My Take on the Goldman Sachs Allegations

BACKGROUND: here is Felix Salmon going in to really great depth on the Goldman Sachs S.E.C. allegations for those of you unfamiliar with the story.

I'm personally long Goldman Sachs (GS) after they lost almost $13 billion in market cap today. The settlement is expected to be in the hundreds of millions of dollars, and GS as a whole only made $4 billion off of subprime bets in general.

Obviously the market is expecting this to have residual effects on their other lines of business, however when I look at the landscape for the business they're involved in I think they've got a pretty good lock down. I would expect GS to distance themselves from the ABACUS events, and potentially blame it on the actions of a few individuals rather than GS internal protocol.

They may end up being liable, however if the trial of the former Bear Stearns hedge fund managers is any indication, some times it's hard to get these charges to stick. Especially since Goldman is going to throw A LOT of money at this to try and make it go away.

This may be my own personal bias, but Goldman Sachs has the ability to snap up the best and brightest minds. If you get a job offer from them, you think long and hard about dropping everything to give it a shot. I'm not going to say I necessarily morally agree with the sorts of things they do, but in terms of having the capacity to make money, they certainly have it. When you have the best minds and a corporate culture that rewards you very well for making contributions to the P/L, you're going to continue to have success in the financial services industry.

A Justification for Government Interference in Pollution

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Although not a recent phenomenon, the particular flavor of the times (temporarily pushed under the rug over concern for the economy) is what should be done about global warming. Topics have included carbon cap and trade agreements, green energy grants and requirements, etc. One thing I think that is important to discuss is whether government regulation could effectively create a positive solution for the climate change problem.

To begin, I'll have to posit some assumptions, for which if one were to disagree with would inherently prevent the same conclusions I am about to draw from being reached:

(1) Pollution has a negative impact on everyone's health, yet remains unpriced because of a tragedy of the commons scenario and an incapability of observing its true cost

(2) Ceteris paribus, a firm earning a profit has positive externalities for society in so much that either through direct distribution or wealth trickle down effects, people are better off (i.e. profit seeking is positive for society, all other things staying equal)

(3) Earning a profit is not a zero sum game, in that if someone is making money someone else does not have to be losing money.

To start off, I think it's important to think of a basic scenario of two polluting companies, G and E. These two companies produce the exact same product for the same market, and the only two choices available to them are whether they're going to implement capital intensive pollution control devices, or not. This breaks out in to a game theory problem.

The picture above represents the payoff matrix for firms G and E in the market described earlier

We'll say that the market is fixed in terms of demand and whichever company can produce the product the cheapest is going to capture the entire market. In the case where the cost of producing the good is the same for the two firms, they will split the market. In splitting the market in the 'Not Pollute' scenario, both firms' payoffs are less than in the 'Pollute' scenario because of the cost of the pollution limiting capital expenditures, let's presume.

The payoff matrix is quite simplistic, but the goal is to convey that in a situation where the winner is the company that can produce the product the cheapest, the Nash equilibrium is going to be that the firms will pollute (in this case, [4,4]).

Now this might not be the most beneficial situation for society, based on the cost we place on pollution (or value on clean air). Let's say cost of pollution to society is 10, such that even though the firms in aggregate would be making a profit of 8 in any combination involving pollute, society as a whole would be incurring a negative payoff even with the addition of this 8 of profit.

In this scenario, it might be in the best interest of the society (of course not for the companies individually) for the government to require a certain level of pollution control, thus forcing the [2,2] payoff to be the Nash equilibrium by preventing the choice of pollution. Presuming this 10 cost is eliminated in this scenario, there's a positive 4 aggregate payoff where before there would have previously been a negative 2.

This can generally be summarized such that the government should intervene when the aggregate payoff from not-polluting is greater than polluting, or:

Er(Diminished G and E earnings, bureaucracy costs, no pollution payoff) ≥ Er(Heightened G and E earnings, pollution cost)

Conclusion

While this is a fun way to look at the problem, it doesn't address the fact that we still don't have a price for pollution. Some have tried in this department, but you will still have difficulty valuing some of the side effects not directly related to human health (i.e. how do you value things like biodiversity?).

In addition, although the bureaucracy cost of implementing said regulation should be a considered cost, it is very likely that the group determining if and how we should regulate (the bureaucracy) might not consider this cost or might dramatically undervalue it.

In light of this, while it is theoretically easy to determine whether to regulate, the inputs of the equation are still unknown. To an investor involved with the G or E firms of the world, a big chunk of the valuation of your investment is determining what the likelihood is that those making decisions will determine that the left side of the equation is greater than the ride side i.e. the value they and their constituents place on clean air. Perhaps this is why in a Democratic regime coal burning utilities and other environmentally questionable investments have gotten crushed.