Friday, March 19, 2004


Sharon Begley's Science Journal appears in each Friday's WSJ and is usually a good way to start the weekend. Today, she cites recent Behavioral Economics research by CMU's Jennifer Lerner on shopping ("How Do You Keep The Public Shopping? Just Make People Sad"). Begley also notes, "Last year, researchers found that anger makes people assess situations more optimistically, downplaying risks and overestimating potential benefits ..." And, "Manipulating customers' emotions to make them overpay (Piping dirges into used-car lots? Running clips of Beth's death scene in 'Little Women'?) is ethically dodgy."

At least two other opinion pieces in today's WSJ cite the anger of John Kerry (before him, Howard Dean) and speculate on the reasons. One columnist ascribes Dems' anger to the way the 2000 election ended. Demagogery may smell ethically dodgy but we usually avoid the label, perhaps expecting less of our politicians than of our sales people.

The insight of Public Choice economics is that political actions can be explained by economic motives. Does this extend to Behavioral Economics? Probably not? Have the Democratic candidates concluded that angry voters will be more likely to take risks -- and vote for them?

The CMU lab experiments were low-cost. The one unfolding before our eyes is much more expensive.