Endowment Effects, Confirmation Bias, and the Politics of Health Care Post-Passage
Sen. Tom Harkin articulates the new conventional wisdom:
“I can’t wait for this debate [about Health Care reconciliation and repeal] to happen. I look forward to it. I will relish it,” Harkin said, on his way into a weekly Democratic caucus lunch. “Now the bill is passed, its signed into law. Now the American people have something. They own it. It’s theirs. And the Republicans are saying they want to take it away from them.”
This sounds like an argument based on the endowment effect. But it’s actually not all that clear that this “bias” operates in the way that Sen. Harkin posits, i.e., that individuals will value the benefits of a law more after it passes, because they exhibit loss aversion. This optimism risks ignoring an important limitation on endowment, which (simplifying radically) suggests that how you obtain property seriously affects whether you exhibit an endowment superpreference. That is: when people think that property is allocated randomly or by grace, they value it less than when they feel they’ve earned it. It strikes me that Republicans will have every incentive to try to convince the public that health care goods have been allocated randomly or by influence peddling, rather than because the Congress deliberated fairly and divided by desert. That’s why fighting about reconciliation and in the courts make strategic sense: not because such battles are likely to succeed (they aren’t) but because they reduce general belief in the procedural legitimacy of reform and attachment to its substantive products.
In other news, Prof. Ann Althouse is very defensive about saying “so what if some idiot said a bad word,” referring to the worst word there is. Of course, what was objectionable was that she first asserted – with no evidence at all – that Representative Lewis had made up the charge (“It’s one of the oldest dirty tricks.) Then, she argued that it was actually white politicians who were upset by the protesters who were racist because they were “so quick to think of powerful black politicians as vulnerable and besieged.” All this while refusing to permit her commentators to actually use the word, presumably because she recognizes that it is uniquely stigmatizing, evil, and, well, racist.
Look: it isn’t racist to deny that racism exists despite evidence of racial animus directed at a black Congressman, nor is patent favoritism to permit your views of that event to be informed by a correspondent who happens to be your newlywed husband. Instead, this feels to me like confirmation bias at work. You credit the evidence you find congenial to your worldview. For Prof. Althouse, it’s hard to imagine that tea party protesters are violent and scary because she knows & loves them, but easy to imagine that black Congressmen are “leveraging patronization” because, well, she doesn’t.