Pundit-onomics: Fortune Favors the Verbose

We all complain about the endless ranting of television talking heads. The more self-assured they seem, the less accurate their predictions appear to be.

Can media executives not see this or is there something else afoot?

Alas, this behavior is perfectly rational from the economic standpoint of the of the network model. The reality is that experts, real or self-imagined, are relatively inexpensive. Exposure increases their value so they are only too happy to appear for free. Further, the more certain they appear, the more credible and therefore attention-generating they seem, thereby justifying the use of the absolute over the thoughtful and nuanced.

In a world in which many consumers of opinion are known to select for a reflection of their own views rather than for a balanced view, their is little downside to moderating one's opinion or, as the following article explains to being wrong. The more extreme one can be, the more likely one is to generate controversy, which in turn, stimulates attention, which, in turn, builds audience.

Predictions about economic trends, new smart phone developments, political scandals, foreign policy disputes, tragedies and disasters, all fuel the demand for even more commentary, however fanciful, fantastic or just plain wrong. There is air time, white space and human memory to fill, so start shoveling. JL

Dylan Byers comments in Politico:

There's little to be gained from saying what everyone else is saying or, God forbid, suggesting that there isn't enough information on which to base a judgment.

James Surowiecki, The New Yorker's resident financial columnist, gets to the economic root of the cable news punditry problem, via all those crazy speculations about Malaysia Airlines Flight 370:

... this welter of improbable hypotheses highlights the peculiar economic incentives of punditry. When uncertainty abounds, pundits strive to differentiate themselves from their peers. There's little to be gained from saying what everyone else is saying or, God forbid, suggesting that there isn't enough information on which to base a judgment. Conversely, there can be huge rewards in taking a flyer on an extreme prognosis and turning out to be right. As one recent study of the economics of forecasting put it, "Being the single winner always entails more glory than sharing the prize."
This wouldn't be the case if pundits suffered when their predictions proved wrong. There are forecasting professions where this happens: stock analysts who err are more likely to get fired. But in the media mistaken conjectures tend to be quickly forgotten, so there's little downside to being bold and wrong. This tendency is exacerbated by the demands of cable news. A couple of weeks ago, James (Spider) Marks, a retired general who is a CNN commentator, suggested that, rather than engage in "a cacophony of conjecture" about the plane, people in the studio should "get back to what we know and what we don't know." "You know how cable news works, don't you, Spider?" the host, Bill Weir, said, with a laugh. "We got time to fill here."

On that note, I'll point you to this fragment from poet Charles Simic, which we posted to the blog more than a year ago:

In ages past when the royal ministers and astrologers wrongly predicted the outcome of some military campaign and lead the country into catastrophe, they were publicly tortured and executed. In our days, they continue to be regarded as foreign policy experts and appear regularly on TV and in op-ed pages peddling disastrous new policies for the nation.