Reference Frames and Evaluations of Senators Clinton and Obama

We (consumers) make choices based on their reference points/anchor points. Or put it differently, we evaluate our choices as prospects given our own reference frame based on past experience and other information. Given a particular situation (prospect) with two potential but very different choices/options, two individuals may adopt the two different choices and both would be considered rational and reasonable by the individuals because their choices are consistent with their reference framework and experiences. Colloquially, sometimes we call this as "optics."

Two behavior psychologists (Kahneman and Tverskey, 1979) discussed this at length and proposed a general theory to explain choices made by human beings. Kalyanaram and Little (1994) demonstrated the application of this theory to marketing, particularly, to pricing.

The prospect theory is applicable to the current Democratic party presidential contest too. Both Senators Obama and Clinton earnestly believe that they have a reasonable path to party's nomination. Using the formal expected utility theory, Clinton should not be so hopeful but she is because she is seeing the nomination road through a different frame than Obama is seeing. That's why this is such a dogged race. Only when one of them -- Clinton or Obama -- perceives his/her prospect dimly will the race for the nomination end.

The report filed by Marc Ambinder of The Atlantic (based on the conference call with the reporters by the two campaigns on May 1, 2008) clearly illustrates the different optics/frame employed by the two candidates.

"THE OBAMA UNIVERSE is governed by the reality that every night, when the Clinton campaign turns out the lights in Arlington, Clinton is not really any close to winning the nomination that when the first intern trudged in at the crack of dawn. The math hasn't changed. Obama is 283 delegates away from declaring victory. Obama is winning two superdelegates for every one she wins; every additional superdelegate he receives equals at least 1.X more superdelegates that Clinton must pick up. Not a single pledged delegate has switched to Clinton -- indeed, when was the last time a pledged delegate ever switched sides; not a single superdelegate has switched to Clinton; a few superdelegates who've counseled patience (like freshman Bruce Braley of Iowa) say they now support Obama. The progressive media establishment -- the Olbermanns and Chris Matthews of the world -- are regularly inveighing against Clinton's decision to stay in the race. Obama has way more money to spend, the support of the party's most reliable constituencies, the ability to expand the map. His divorce with Rev. Wright takes a general election hot pot off the table. He is much more likeable and seen as much more honest than Clinton; Republicans and independents still have warmer feelings for him than they do with Clinton. Clinton's embrace of a gas tax pause shows that her campaign isn't serious about policy and voters perceive that. Oh, and voters in Indiana and North Carolina aren't watching cable news and aren't really paying attention to Rev. Wright. And besides, they're tired of all of this: tired of the noise, tired of the distractions, tired of old politics, and ready for change. This long race is hurting the party; superdelegates know this, and the tipping point has been reached.

IN THE CLINTON UNIVERSE, Clinton has all the green cards. Victory, (enough) money, momentum in the national polls, the public acknowledgment of Republicans that she'd be the tougher candidate, the fact of undecided superdelegates, and the testicular fortitude that impresses white working class voters... A month of scrutiny has noticeably eroded reduced Obama's standing with critical constituencies, and in many critical states, Clinton's brand is a winner: according to three new telephone surveys by Quinnipiac, in Florida, Clinton leads McCain by eight points; Obama and McCain are tied. In Ohio, Clinton leads by ten points; Obama and McCain are tied. Both Clinton and Obama lead McCain in Pennsylvania; Clinton's margin is twice that of Obama's. Most of the remaining superdelegates represent white working class districts (about 75% of them, in the estimation of one Clinton strategist.) They haven't come out for Obama when was winning; they surely won't support him when he's losing. They'll wait for information to see who'll beat John McCain, and right now, that evidence points to Clinton. After Indiana (and depending on the margin in North Carolina), it will point even more to Clinton. Obama has proven himself out of touch and unable to dent Clinton's standing with a critical swing constituency; even if African American turnout exceeds 100 percent, Obama would not be able to win Ohio with a double-digit deficit among white, working class voters. Clinton's victory in Pennsylvania precipitated a change in the fundamental dynamic of the race. Obama no longer appeals to independents; Clinton and Obama now have roughly the same appeal to independents. In a (near) recession, with expensive gas and good prices, with foreclosed homes and rising health care premiums, Clinton has the knowledge and leadership to turn this economy around, and that explains why she's done so well. Finally, she's an underdog, and Democrats root for the underdog. This long race is helping the party; Democrats are excited; Superdelegates perceive this, and the tipping point is coming soon."