In search of a rural retreat, ideal for apple picking? A decent close option to Chicago is Heinz Orchard. No mazes, hay rides etc…just apples. The only problem: what do you do with the 40 pounds of apples you end up picking…?!!
- Submitted with no implied approval and simply as an exquisite example of a rhetorical takedown by someone apparently deeply scarred by whoknowswhat. (This doesn’t mean that all other sordid links lacking this disclaimer are submitted with implied approval. Thank you for the cake, now I will eat it too.)
- Mobius comic strip
- Reading Playboy to the blind.
- Soap operas and unknown soldiers.
- Pine-nut mouth. Clues from Denmark.
- “We shared a cab, you hit me in the face.”
I double-checked to make sure it wasn’t April 1 when I saw this story in the Independent:
The Queen asked ministers for a poverty handout to help heat her palaces but was rebuffed because they feared it would be a public relations disaster, documents disclosed under the Freedom of Information Act reveal.
Royal aides were told that the £60m worth of energy-saving grants were aimed at families on low incomes and if the money was given to Buckingham Palace instead of housing associations or hospitals it could lead to “adverse publicity” for the Queen and the Government.
Check out their request.
And why you should too.
There is a painful non-convexity in academic research. Only really good ideas are worth pursuing but it takes a lot of investment to find out whether any given idea is going to be really good. Usually you spend a lot of time doing some preliminary thinking just to prove to yourself that this idea is not good enough to turn into a full-fledged paper. Knowing that most ideas are unlikely to pan out there is an incentive not to experiment on new projects.
Blogging bridges that gap in a way I didn’t expect when I started. Blogging means that half-baked ideas have scrap value: if they are not publishable you can at least write about them on the blog. This means that you are more likely to recoup some of those costs of experimentation and you undertake more projects ex ante.
So, readers, don’t thank me for blogging (not that I thought you had any good reason too.) I thank you for wading through the scraps.
Mayor Daley will step down as Chicago Mayor after over two decades in office. His campaign coffers are full and his popularity is high and yet Daley the Younger will voluntarily leave office after serving a slightly longer term than Daley the Elder. We can ascribe lofty reasons for his departure but at Cheap Talk we usually focus on the basest of human motives: rational self-interest.
First, if Daley had decided to run again, I’m assuming he would have been re-elected easily with no candidate coming close to him popularity. His voluntary departure signals that there is some hidden problem that’s going to be trouble in the next term. It could be trouble for Daley alone, the private value case, such as an affair, some personal corruption or something of that sort. And there is a prime candidate for this scenario: Daley’s wife has cancer and he may rightly want to concentrate on her welfare. So, the private value case is possible. In the opposite scenario, there is some issue that will affect anyone who becomes Mayor, the common value case. There is an obvious candidate for this scenario too: the City of Chicago is in deep financial trouble and the next Mayor will have to sort that out. Forget the glamourous public projects like Millenium Park, greening the city etc. There will be nitty-gritty fights with unions to renegotiate pension deals, cutbacks, layoffs and protests.
Not only will that be painful but re-election will be hard. Voters will blame the next Mayor for everything that goes wrong whether it’s is his fault or not. The next Mayor will be a one term Mayor.
So, Rahm should spend a few years at some investment bank, making millions in a few short years – just like he did last time around. He can build his political machine and run for Mayor the next time around.
The never-enigmatic Presh Talwalker analyzes the strategic bobbling occasionally effected by the heads of Indians.
I have personally witnessed this maneuver in two contexts which fall outside of the categories Presh identifies in his post.
- Indian students asking me a question and getting an answer. The ensuing head-bobble has always suggested to me something like “of course. obvious. so obvious in fact that the thundering stroke of clarity is making my head roll around.” I have also noticed that on these occasions the bobble is contagious. The Indian student sitting next to the questioner bobbles sympathetically.
- Indian classical music. The tabla player, say, will bobble just after a rapid-fire phrase. There might even be a sound emitted. It’s something like “Chella.” The whole display says something like “Behold, the rhythm is so frenetic that it is rebounding back through my arms and neck and dissapating through the top of my head. Chella.”
Obama has an interesting strategic decision to make about how to engage the Tea Party. If there is one power that the President has, even when he has lost momentum policy-wise, it is to control attention. How should he use this power in relation to the Tea Party?
Right now the Tea Party has few leaders, and none with any real power. Obama can essentially anoint a leader by picking him/her out of the crowd and engaging directly. For example, by personally responding in a press conference to some attack and addressing the Tea Partier by name. As the Tea Party tries to internally organize, a well-targeted salvo could throw a wrench in the works. On the other hand, it could backfire and provide them with a much-needed lightning rod.
He could frame the upcoming election as “sane, albeit perhaps incompetent Democrats” versus “nutty Tea Partiers.” By doing so he would raise the stakes for the Tea Party higher than they might want to make them. In its infancy, the Tea Party may not be ready for an up-or-out test.
Obama could be wisely waiting until after this election to make any move like this. It may even be that he and the Tea Party have a mutual interest in keeping their profile low for now. Because making this election out to be a test of the Tea Party’s fitness can only really have consequences in the event they fail to make a good showing. In that case, the Tea Party disappears and Obama loses a potentially valuable third-party threat in 2012.
Instead, if they tacitly agree to view the Tea Party as too young to be a big contender this November, they both keep their hopes alive in the event of defeat. Which of course means that the mainstream Republicans should have exactly the opposite incentive.
Now I am trying to figure out how this fits in with the story.
For the sake of argument let’s take on the plain utilitarian case for waterboarding: in return for the suffering inflicted upon a single terror suspect we may get information that can save many more people from far greater suffering. At first glance, authorizing waterboarding simply scales up the terms of that tradeoff. The suspect suffers more and therefore he will be inclined to give more information and sooner.
But these higher stakes are not appropriate for every suspect. After all, the utilitarian cost of torture comes in large part from the possibility that this suspect may in fact have no useful information to give, he may even be innocent. When presented with a suspect whose value as an informant is uncertain, these costs are too high to use the waterboard. Something milder is preferred instead like sleep deprivation.
So the utilitarian case for authorizing waterboarding rests on the presumption that it will be held in reserve for those high-value suspects where the trade-off is favorable.
But if we look a little closer we see it’s not that simple. Torture relies on promises and not just threats. A suspect is willing to give information only if he believes that it will end or at least limit the suffering. When we authorize waterboarding, we undermine that promise because our sleep-deprived terror suspect knows that as soon as he confesses, thereby proving that he is in fact an informed terrorist, he changes the utilitarian tradeoff. Now he is exactly the kind of suspect that waterboarding is intendend for. He’s not going to confess because he knows that would make his suffering increase, not decrease.
This is an instance of what is known in the theory of dynamic mechanism design as the ratchet effect.
Taken to its logical conclusion this strategic twist means that the waterboard, once authorized, can’t ever just sit on the shelf waiting to be used on the big fish. It has to be used on every suspect. Because the only way to convince a suspect that resisting will lead to more suffering than the waterboarding he is sure to get once he concedes is to waterboard him from the very beginning.
The formal analysis is in Sandeep’s and my paper, here.
Peter Cramton emailed a bunch of us today asking us to sign a comment he and others are submitting to a House Committee. There are many issues but one is related to an odd pricing rule proposed for buying equipment for Medicare.
Suppose Medicare needs x machines and wants to save money. They can run a simple procurement auction (or some variant) as follows: Suppliers submit bids and the lowest x bids are accepted and all are paid the highest accepted bid. This is similar to a market mechanism that spits out a market clearing price that all suppliers receive. Just like the market mechanism, all but the highest cost supplier get surplus at the market-clearing price. Is there some way to leave the suppliers with less rent and for Medicare to save more money? Unless Medicare knows the costs of production of the suppliers, the answer is basically “No”, under reasonable assumptions. Any mechanism has to leave low cost suppliers with information rent and the minimum rent is left by the market-clearing mechanism.
But it seems that does not stop Medicare from trying! They are proposing a median pricing rule where the lowest x bidders are chosen but are paid the median of the x winning bids. This means the top 50% of bidders are not paid their submitted bids. This leads to many pathologies as the authors point out in their comment. First, the top 50% may simply refuse to supply and withdraw their bids (this is allowed under the present auction rules). Then Medicare will be left with less equipment than it needs. Or the suppliers may make a loss if they are forced to supply for one reason or another. This is not good for the long term financial health of the suppliers. Or they may game and shade their bid etc. etc.
Check out the comment for more detail. Peter is providing a public good and testifies in front of the House Committee on September 27. We’ll see what happens. If the median pricing rule stays in place despite Peter’s best efforts, expect to see (many!) papers working out equilibria of the procurement auction under that rule!
Two guys named David Pendelbury and Eugene Garfield use citation counts (combined with some other magic) to predict Nobel laureates. They claim success: they have“correctly predicted at least one Nobel Laureate each year with the exception of the years 1993 and 1996.” Granted, since they are picking 5 or so people in four fields (Chemistry, Economics, Physics, Medicine) that doesn’t seem like such a big deal.
But for the record, here are the predictions for Economics.
- Alberto Alesina for theoretical and empirical studies on the relationship between politics and macroeconomics, and specifically for research on politico-economic cycle.
- Nobu Kiyotaki for formulation of the Kiyotaki-Moore model, which describes how small shocks to an economy may lead to a cycle of lower output resulting from a decline in collateral values that creates a restrictive credit environment.
- John Moore for formulation of the Kiyotaki-Moore model, which describes how small shocks to an economy may lead to a cycle of lower output resulting from a decline in collateral values that creates a restrictive credit environment.
- Kevin Murphy for pioneering empirical research in social economics, including wage inequality and labor demand, unemployment, addiction, and the economic return of investment in medical research, among other topics
David K. Levine has written a white paper for the NSF proposing that they invest in large-scale simulated economies as virtual laboratories:
An alternative method of validating theories is through the use of entirely artificial economies. To give an example, imagine a virtual world – something like Second Life, say – populated by virtual robots designed to mimic human behavior. A good theory ought to be able to predict outcomes in such a virtual world. Moreover, such an environment would offer enormous advantages: complete control – for example, over risk aversion and social preferences; independence from well-meant but irrelevant human subjects “protections”; and great speed in creating economies and validating theories. If we were to look at the physical sciences, we would see the large computer models used in testing nuclear weapons as a possible analogy. In the economic setting the great advantage of such artificial economies is the ability to deal with heterogeneity, with small frictions, and with expectations that are backward looking rather than determined in equilibrium. These are difficult or impractical to combine in existing calibrations or Monte Carlo simulations.
My colleague Josh Rauh who is a pensions expert testified in the front of the Evanston City Council. You can read about his report here. I particularly enjoyed the little jokey exchange at the end:
‘Do we want to take action now and forge a financially responsible course?” If not, he [Josh Rauh] said, the City could just keep going in the present direction, “hoping that someone will bail us out. We could get state and federal bailout money.”
“Are we too big to fail?” asked Mayor Tisdahl.
“The City of Chicago is too big to fail,” responded Dr. Rauh; “the City of Evanston may not be. …
A guy sometimes says stuff that, for reasons completely mysterious to him, hurts a girl’s feelings. It comes out that she’s hurt and he desperately tries to explain. He didn’t mean it. He didn’t think she would interpret it that way. He was just talking. She’s taking it too personally.
He forgets to call, he misses important dates, he get stalled by unexpected commitments. She listens to all of his excuses.
He’s trying to convince her that he had the right intentions. You see, he thinks that relationships are all about moral hazard. He wants her to know that he’s trying hard, but mistakes get made.
And he can never figure out why this isn’t enough for her. But the reason is simple. For her, relationships are all about adverse selection. It’s not his actions per se, it’s what they reveal about his type. She’s perfectly willing to forgive his missteps, she believes him that he’s trying hard and that he didn’t know he was being a louse, but that’s precisely the problem. If he weren’t such a lemon he would know the right way to say things, she’d always be in his thoughts, and she’d always be his highest priority.
Plenty of government intervention means plenty of data – data that can be creatively exploited to study long-standing questions of political economy such as….
Do politicians vote based on ideology, constituent preferences or to get lots of cash from lobbyists to pay for the re-election campaigns?
“The Political Economy of the U.S. Mortgage Default Crisis” by Atif Mian, Amir Sufi and Francesco Trebbi (forthcoming in AER I believe) uses data on voting in Congress on the American Housing Rescue and Foreclosure Prevention Act AHRFPA and the Emergency Economic Stabilization Act EESA to study politicians’ voting behavior. AHRFPA supported mortgage holders who were financially distressed and EESA supported banks supplying them with liquidity. We can think of them as constituents and special interests. There is data on default rates in a district at the ideological level – you can see the default rate among Democrats and Republicans. There is data on contributions made by the financial industry to a candidate’s campaign war chest.
There is no variation in Democratic votes for AHRFPA so the paper studies Republican votes. The authors find that Republican politicians’ votes for the bill are correlated with the default rate of Republican constituents in their district. Moreover, if the district lies in a Presidential swing state and is more competitive,the response is stronger.
On the EESA, the authors find that campaign contributions by the financial industry are correlated with voting for the bill. Also, retiring politicians less likely to vote for the bill, even if they received campaign contributions from the financial industry in the past. Finally, the more ideological a politician is, the less likely he is to respond to these measures (ideology is measured on some scale that is usually employed in these studies).
Lots of interesting and provocative results. Lots of caveats and subtlety I cannot do justice to in this post. Take a look at the paper.
This morning I was on my own for breakfast so I looked around and saw heirloom tomatoes from the garden, a jar of artichoke hearts with a few left after last night’s chickpea salad, and chive oil which I made last week as a lobster marinade and have put to good use in various applications since.
So I made an omelette. (I am a devotee of the Alton Brown omelette method.) And then I ate it.
Sarah Palin puts her toe in the water in Iowa and Robert Gibbs calls her:
“a formidable force in the Republican Party and may well be, in all honesty, the most formidable force in the Republican Party right now.”
On the other hand:
“While popular among conservatives, Palin still has a long way to go with other Americans. A CBS News poll on Thursday said 46 percent of American voters viewed Palin unfavorably, compared with 21 percent who have a favorable opinion of her and 33 percent who are undecided.”
The season finale of Bachelor Pad featured a surprise twist. The share of the prize money would be decided by a “keep” or “share” Prisoners’ Dilemma-style game. $250,000 was at stake and the last standing couple, Dave and Natalie, could split the money if they both chose Share. If one of them chose “Keep” then he/she would take all the money for him/her-self. If they both chose “Keep” the $250,000 would be shared among all the contestants who were previously eliminated from the show.
What makes this game different from the Golden Balls game is that the decision to Share doubles as a signal to be a faithful partner in their post-show everlasting love.
The clip below is a bit long, but the highlight comes in the middle when the loser bachelor(ettes) give their game theoretic analyses while Dave and Natalie go into separate rooms to prove theorems.
Thanks to Charles Murry for the pointer.
Elton John and Bernie Taupin pose a classic conundrum:
It’s sad, so sad
It’s a sad, sad situation
And it’s getting more and more absurd
It’s sad, so sad
Why can’t we talk it over
Oh it seems to me
That sorry seems to be the hardest word
Elton must have done something in the recent past that requires an apology. He wants his partner to “make you love” him. What has he “got to do to be heard”?
So his entreaties are not being heard. Why? Elton has a credibility problem. He wants love whether or not he is truly sorry. If he gets a positive response from saying “sorry” whether he means it or not, he’ll just say it. It is, of course, cheap talk.
To make Elton’s apology credible, it has got to be hard or costly to say sorry. There has to be some loss of face, some blow to pride from saying sorry. But to make “sorry” truly credible, the cost of saying sorry has to be low if Elton is truly sorry and high if he’s not sorry at all. So, if Elton is having a hard time saying sorry, maybe he’s not really sorry?
What would you believe in the face of the unbelievable? For example, how would you react if you discover suddenly that you can fly. Before today flying was impossible, but now you can do it. Something you were convinced of is wrong and you have to decide whether it’s that you can’t fly or that you are not prone to hallucinations.
In fact you already know how you would react, because it happens in your dreams. Have you ever dreamed you could fly? If so, did you infer that you must be dreaming? Some do, and then wake up. (Poor them.) Others just go on flying.
Are you irrational to believe you can fly?
Maybe you aren’t fooled by flying dreams or maybe you’ve never dreamed of flying. But crazy things happen in everybody’s dreams. What is the craziest thing that happened in your dreams that you nevertheless accepted as the way the world must work since after all it’s happening right before your eyes?
Tomatoes are about the only attribute these two have in common, so the choice comes down to personal preference. Heinz is spicier, with distinct Worcestershire notes. Market Pantry has mostly tomato flavor, which comes through precisely because it’s not as spicy. The flavor differences are apparent straight from the bottle or with fries.
With that conclusion, summarized briskly in workmanlike prose by journalists you’ve never heard of, Gladwell’s Grand Unifying Theory of Ketchup–which he was allowed to present in painstaking detail (and 5,000 words) in the nation’s most prestigious magazine–simply turns to air.
The background is in the Globe article.
Jean Tirole has written the best theoretical analysis I have seen of the role of government intervention to revitalize frozen asset markets. The key idea in this paper is that investors need to finance their next project and are unable to do this by selling their “legacy” assets because adverse selection has frozen the market.
A government buyback of these toxic assets attracts the bottom tail. The government of course is losing money on all of the assets it buys. But the payoff is that it rejuvinates the market: private financiers will now step in and buy the assets of those who refused the government offer. It’s a surprising result but ex post its pretty easy to understand.
If the government is offering a price 
All that was required was that the government price
The paper then goes on to study the optimal intervention when the market is not restricted to simple buybacks. The optimal scheme is a mix of buybacks and partial transfers of legacy assets that keep “skin in the game” to reduce the downstream adverse selection problem. The government is trying to minimize the cost of the intervention by spurring as much activity as possible from the private finance market.
This paper is worth studying.
This optical illusion appears on a street in West Vancouver. It is an experiment to see whether the image of a girl crossing the street will get drivers to slow down.
The pushback has been from groups who worry that drivers might react by braking or swerving and cause an accident. But that’s the short-run problem. Isn’t the bigger worry what happens in the long run when drivers no longer react when they see a child crossing the street?
More on Mr. Sha.
- Stark County, Ohio.
- I lost the game.
- Auto-tune your voicemails.
- Classically conditioning your roomie.
- Sartre’s facebook Wall.
- First ever commercial for a marijuana dispensary. (The real humor here is that you are first forced to watch an ad for “Spiriva” which is medicine for who-knows-what. This is targeted advertising.)
The demographic changes that have swept the county reflect what is happening across the state and much of the nation. It has happened slowly but surely over the course of a generation, becoming increasingly apparent not only in a drive through the 34 cities that fill this sprawling 789-square-mile county south of Los Angeles, but also, most recently, in the results of a presidential election. In 2008,Barack Obama drew 48 percent of the vote here against Senator John McCain of Arizona. (By comparison, in 1980,Jimmy Carter received just 23 percent against Ronald Reagan, the conservative hero whose election as California governor in 1966 and 1970 was boosted in no small part by the affection for him here.)
The article focuses on changes in ethnic composition but my sense is that a lot has to do with generational differences as well. During its rapid growth the people who lived there were the people who chose to move there, plus their kids. Their kids didn’t make that choice and so they are more of a random sample. Plus they naturally rebelled against the conservative culture that their parents created.
I thank Matt DeBeer for the pointer.
I am partial to RJ’s Black Soft Licorice. In moderation, like cocaine (I imagine!), it does no harm. But like cocaine (I imagine!), one is tempted to consume it in excess, a bag at a time.
How can I just eat a reasonable amount? I could joint Licorice Lovers Anonymous (LLA) and complete a ten step program to kick my habit entirely. I am sure there are many fellow sufferers out there, who love RJ’s not too little but too much. Just a few tweets would allow us to coördinate and set up weekly meetings. Seems like overkill. And anyway, I don’t want to kick the habit entirely, just control it.
I see my five-year old wandering around, causing trouble and a simple solution appears magically in my mind. I ask him to hide the licorice. He is very good at hiding things that do not belong to him – remote controls, his brother’s toys, my watch etc. etc. He’ll love to hide the licorice. There are a couple of problems. It is my intention to ask him to bring the licorice back every day so I can have a few pieces. But there is s significant chance that he’ll forget where he hid the bag. So what? Then, we’ll lose the bag and the licorice. But this is not any worse than the LLA solution of cutting out the addiction completely.
There is a second and quite famous problem from incentive theory: Who will monitor the monitor? In other words, perhaps your police-kid will eat the licorice himself. For this problem I have an answer. My five-year old will consume strawberry Twizzlers by the cartful, but black, spicy licorice, I think not. I am proved right. One piece of licorice is chewed but the rest are intact.
Thinking about it, I realize that I have used a variation of an old idea of Oliver Wlliamson’s, “Credible Commitments: Using Hostages to Support Exchange” (jstor gated version). In his analysis, a contracting party A voluntarily hands over an “ugly princess” to party B to give party A the incentive to perform some costly investment. Party B does not value the princess and hands her over once the investment is sunk. In my argument, the ugly princess is the licorice and instead of specific investment, I want to commit to avoid over-consumption of an addictive good.
This pretty much gives you principles under which this mechanism works: Consumption of good that is addictive for party A but has no value for party B can be controlled by allowing party B to control the use of the good. Party A might return the favor for party B (e.g. by rationing computer game time). Only, my party B would never agree to this voluntarily and would see as a violation of civil liberties rather than as a favor. This level of addiction I have no solution for….
- They are presumably sitting on a mountain of internal research on the science of herding people efficiently. My favorite example was how they seat people for Captain EO. One entire side of the theater opens up and people are naturally guided in lines that form parallel to the rows and eventually feed into them. The whole process takes about 1 minute to seat about 500 people. The host asks those in the front of the lines to go 2/3 of the way down. They know that a request to go all the way to the edge would be ignored so they offer a compromise which is mostly honored.
- There is now a system called “fastpass” which allows you to reserve a time 1-2 hours later when you are able to bypass nearly all of the line. The efficiency doesn’t come from allowing people to take more rides. The easy way to see that is to note that each ride runs a fixed number of times in a day and if every ride has a line all day then the total number of rides taken is that fixed number. Rather the efficiency comes from allowing patrons to spend less time in line (and more time in the gift shops.)
- The cars in Autopia must have been grandfathered by the California legislature because they still burn fossil fuels and would not pass California emissions standards.
- They are the residual claimant for just about anything that goes wrong for their patrons. Not surprisingly we have never been to a restaurant anywhere near as knowledgeable and accommodating for my son’s food allergies.
- The debate about whether commercial developers provide the socially optimal level of public parking could be informed by comparing the number of restrooms per square foot on Main Street in Disneyland, to say Broadway.
- Some rides have lines that fork and you have to commit to one branch without full knowledge of the relative wait times. Pick the side with the most shade. Not just because shade is good, but also because people cluster in the shady sopts reducing the total density and making the wait time shorter per fixed line length.
- I got RSI from the Buzz Lightyear “ride.”
The commenting dynamic is very different on small blogs than it is on popular blogs. On small blogs, people typically comment when they have something to contribute or ask that is relevant to the post. These are frequently of high quality (relatively speaking; recall Sturgeon’s Law: 90 percent of everything is crap). On more popular blogs, this positive commenting dynamic is confounded by the presence of eyeballs. Every post is read by many thousands of people. For the self-involved who could never attract such a large audience on their own, this is an irresistible forum for expounding pet hypotheses, axe-grinding, and generally shouting at or expressing meaningless agreement with the celebrity post-authors.
which sounds plausible but it assumes a sorting condition that is debatable. Presumably everyone, the high-quality and low-quality commenters alike, want a bigger audience. The question is one of relative elasticities: does a percentage increase in audience lead to a larger percentage increase in low-quality comments relative to high-quality? I am not sure.
There is a perception cloud because most of us think that our own comments are the highest-quality ones and so the overall pool of comments appears distorted downward in quality. But there is one force for Gresham’s law that may swamp any having to do with commenters’ motives. There are simply more ways to be wrong, off-topic, and crazy than there are to be right, on-topic, and smart. So even if the sample scales proportionally with audience size, the space of good quality comments will be exhausted quickly leaving the long tail for the riffraff.
Bottom line: the way to maximize the proportion of good-quality comments is for the bloggers themselves to use up all the crazy ideas at the start. I like to think Sandeep and I are getting better and better at this.
An Israeli leftist believes that right-wing Prime Minister Neyanyahu can bring peace:
“The left wants to make peace but cannot, while the right doesn’t want to but, if forced to, can do it.”
Why can a right-winger make peace, while a left-winger cannot? There might be many reasons but the one mentioned in this blog must of course draw from Crawford-Sobel’s Strategic Information Transmission which has become the canonical model of the game-theoretic notion Cheap Talk. The key intuition was identified by Cukierman and Tommasi in their AER paper “Why does it take a Nixon to go to China?” (working paper version).
Suppose an elected politician knows the true chances for peace but also has a bias against peace and for war. The the median voter hears his message and decides whether to re-elect him or appoint a challenger. Given the politician’s bias, he may falsely claim there is a good case for war even if it is not true. It is hard for a politician biased towards war to credibly make the case for war. He risks losing the election. But if he makes the case for peace, it is credible: Why would a hawk prosecute for peace unless the case for peace is overwhelming? So the more a politician proposes a policy that is against his natural bias, the higher is the chance he gets re-elected. If the case for peace is strong, a war-biased politician can either propose war in which case he may not get re-elected and the challenger gets to choose policy. Or he can propose peace, get re-elected and implement the “right” policy. In equilibrium, the latter dominates and Nixon is necessary to go China, Mitterand is necessary for privatization etc…
Is this why Netanyahu believes he can make peace? Maybe he cares about leaving a legacy as a statesman. This would make him a less credible messenger – via the logic above, he is biased towards peace and any dovish message he sends is unreliable. Let’s hope that the stories of his strongly his Zionist father and hawkish wife are all true. And then Hamas should fail to derail the negotiations…And Hezbollah should fail in its efforts… And the other million stars that must align must magically find their place….
Cheap Talk 
