The dramatic imperative
Imagine, if you will, a movie that doesn’t end when it should. The hero gets the girl, wins the big game, triumphs over his adversary… and the movie won’t stop. The audience is uneasy, suspecting a False Ending. Maybe the villain isn’t really dead, and will pop up out of the bathwater with a big knife like Glenn Close in Fatal Attraction.
And so it is with the Presidential election. The contest is effectively over, but the ending is eleven days away. Note that everyone has a vested interest in prolonging the suspense as long as possible:
- McCain: We still have a chance to win, so get out and vote!
- Obama: We could still lose, so get out and vote!
- Media: This could go either way, so keep watching!
All of this suggests a systematic bias towards believing that the contest is closer than it really is. We’re starting to hear rationalizations to support the bias: polls are inaccurate, Truman vs. Dewey, the Bradley Effect, underpolling of cell phone users, young people won’t turn out, voter fraud, yada yada yada.
You can probably see where I’m going with this. The systematic bias should show up in McCain’s Intrade odds. McCain is currently at 13% or so. Some of that is the delusion of true believers, some is the gambler’s tendency to overpay for long shots, and some is the dramatic bias. The idea is not to try to separate these, but to point out that the biases are all in the same direction. Some of the 13% is a realistic estimate of a Black Swan event, but that probability should decline as time runs out, while the psychological and dramatic biases should remain constant.