U.S. Markets open in 4 hrs 13 mins

Donald Trump may be exploiting a psychological bias to win votes

Kevin Chupka
Executive Producer/Writer

Love him or hate him presumptive Republican presidential nominee Donald Trump has struck a chord with American voters. So what is behind his rise to political power? James Surowiecki, columnist for The New Yorker Magazine suggests it has at least something to do with the deep-seated psychology of winning and losing.

In his recent column, Surowiecki dove into loss aversion theory. In short, it suggests people hate losing more than they like winning.

Seen another way, if you offered someone $50 or a 50/50 chance at $100 or $0, most would take the $50 and be on their way.

When you flip the script, however, the opposite occurs. Offer someone the choice between losing $50 or a 50/50 chance at losing $100 or breaking even and they’ll try their luck in hopes of losing nothing.

This is a popular area of study for stock trading. Do investors hold onto a winning name long enough? Do they hang onto a loser longer than they should hoping for a turnaround?

But how does this translate into the 2016 presidential election cycle?

Trump “emphasizes the word losing a lot,” Surowiecki notes. “‘We’re losing to the Chinese, we’re losing to the Mexicans, we’re losing our country’...it’s all about how bad things are.”

That, he posits, is part of why people are doubling down on their support of the brusque billionaire. “They feel like they’ve been losing, especially Republican voters...They are willing to take a risk on a very risky guy because they think it might make them whole again.”

If loss aversion theory is to be believed it also means Hillary Clinton may need to proceed with caution when offering criticism of Trump as a risky bet. As Surowiecki sees it, “the danger is, for those people who really support Trump, when they hear ‘he’s risky, you don’t know what he’s going to do’ they say ‘ well that’s better than what we’ve been living through for the past eight years.’”

There is a glimmer of hope for Clinton supporters however. “There is a point at which a candidate can become so risky that even people who are losing are like ‘I’m not willing to risk losing more on this.’ The danger for Trump is that he has to be careful not to appear too out of the box.” Surowiecki notes Trump’s Tweet after the Orlando massacre as perhaps a bit too outside the box but notes that tragedies like the one in Florida “amplify people’s sense of fear and loss” and that could be a strength for Trump supporters ready to risk their vote.