Irina analyses the Brexit and Bremain campaigns ahead of the EU Referendum vote

The EU Referendum is probably the hottest of the hot topics at the moment (except, of course, for the Euro 2016 championship). Outside, posters and banners are everywhere, and there’s no escaping it indoors either through the TV and radio debates and the leaflets coming through our doors.

As an EU citizen living in the UK, I’m not allowed to vote, but as a market researcher, I’m fascinated by the two very different campaigns and the effects they have on the upcoming vote. The General Election showed that the industry might be incapable of making exact predictions, but, using the right tools, we can understand how and why voters will decide between “in” and “out”. One of the greatest tools we have for that is behavioural economics.

System 1 vs. System 2

As a student, I used to love philosophy; it just seemed to provide the right answers to all the complicated questions of our existence. If there’s one thing that I learned it’s that we are rational beings.  Cogito ergo sum, or I think therefore I am, is Descartes’ most famous phrase that influenced the Western rationalist paradigm. It was almost an unquestioned rule. Economists incorporated it too into their rational choice theory, outlining that humans make rational choices, trying to maximize their benefits and minimize the costs.

Recently though, a new theory came about, revealing that we are not always those rational beings. In fact, most of the time we’re not, and we make most of our decisions irrationally and effortlessly, as we have a limited amount of “rational energy” that we can consume on a daily basis. In other words, our cognitive load is limited.

This theory is called behavioural economics, and it’s fascinating!

In his pioneering book, “Thinking, Fast and Slow”, Daniel Kahneman talks about System 1 – thinking fast, and System 2 – thinking slow.

System 1, he says, is effortless, automatic, emotional and irrational. It’s also the one that we use the most. System 2, on the other hand, is responsible for harder, more difficult mental activities, requiring choice and concentration.

System 2 is “the conscious, reasoning self that has beliefs, makes choices and decides what to think about and what to do”, while System 1 “effortlessly originates impressions and feelings that are the main sources of the explicit beliefs and deliberate choices of System 2”.

To summarise:

System 1 – emotional

System 2 – rational

What does all of this have to do with the EU Referendum?

Just like some before me, I cannot help but notice how Vote Leave seems to be a campaign for System 1, while Vote Remain addresses System 2. Depending on which side you are on, it will probably determine whether you see this as a positive or a negative!    

In a recent BBC article, Chief Correspondent Gavin Hewitt said that “the appeal of the Leave campaign is to the heart, to the gut”. A survey by TNS showed that almost 4 in 10 SMEs would vote to leave for reasons such as: “independence and return to British values” and “my heart tells me to leave”.  It is a fight for returning to the Great British identity, in which no external organization dictates the future of the UK. It is an emotional, strong and simple argument that cuts straight to the heart of our System 1 decision making. It is nostalgic. There are no hard facts to process, no complicated rational calculations to make. This is System 1 in action!

Vote Remain, on the other hand, addresses System 2 and it brings into discussion serious economic arguments. It has all the experts on its side (from Obama to the International Monetary Fund to 9 out of 10 of the country’s economists), who have all agreed on the negative effects of Brexit on the British economy, employment, pensions and the housing sector, just to state a few. However, despite the seriousness of their predictions, they bring in arguments that require rational thinking and rational decision making. They require an attentive, uninterrupted System 2. Given that behavioural economists warn us that we only have so much resources to invest in rational decision making processes on a daily basis, I cannot help but wonder – will the EU Referendum be one of them?

Vote Leave – A System 1 Goldmine

In his book “Unconscious branding”, Douglas van Praet outlines how marketers can create behavioural change by using the System 1-System 2 relationship. While reading about them in this very interesting article, I couldn’t help but come up with examples on how the Vote Leave campaign, willingly or not, is applying them every step of the way. Before looking at each of them, it’s important to state that this analysis is not about the accuracy of the facts brought in by the campaign, it is not a reality check, as there are plenty of experts out there that have proven them wrong or right. This is an analysis of how the campaign is constructed.

1. Interrupt the pattern

The first step in creating behavioural change is interrupting “predictable perceptual patterns and do[ing] something unexpected”, says Manfredi, paraphrasing Praet.

Ever since the campaign started, Vote Leave is constantly giving examples that can be perceived by the voters as failings of the EU – migration and healthcare are just a few topics that disrupt the pattern of a successful EU membership.

2. Create comfort

Once the shock to the system is over, Praet mentions the importance of creating comfort – “once you’ve done something shocking, it’s important to satisfy its [System 1] craving for familiarity”.

Norway is a preferred example very often brought into discussion as a model that the UK can aspire to outside of the EU – “if they can do it, why can’t we?” is something that I’ve heard often.  While it was a strong argument brought in by Vote Leave, Vote Remain explained how Norway, as part of the free market, must accept the rules on the freedom of movement of goods and people; as such, Vote Remain says, being like Norway will not reduce the number of migrants the UK accepts. Therefore, we can assume that, if used by Vote Leave, this argument can create a cognitive bias – a mistake in reasoning,  “a systematic (non-random) error in thinking, in the sense that a judgment deviates from what would be considered desirable from the perspective of accepted norms or correct in terms of formal logic. However, understanding that this is a cognitive bias requires, again, an uninterrupted and attentive System 2 on the side of the voters.

3. Lead the imagination

The next step in changing behaviour is employing the imagination. This is where Praet recommends engaging System 2 – “bring in the data to show the benefits of changing the target behaviours”. A good example here is how all Vote Leave buses have written on them in massive letters “we send £350 million a week, let’s fund our NHS instead”. This leads the imagination of the voters to think of future consequences of their changed behaviour.

4. Shift the feeling   

As we mentioned before, emotions influence behaviour, System 1 influences System 2, so, paraphrasing Praet, Manfredi says, “appeal to feelings associated with engaging in the new behaviour” – it is here where Vote Leave talks about being back in control and taking charge of the future of the UK.

5. Satisfy the critical mind

Presenting voters with data that is relevant to their own “unique set of circumstances is critical to prevent them from rejecting the data as not applicable to them”. Experts are already discussing a vote that will be differentiated by class and social background. The older and the economically vulnerable who are fearful of their British identity disappearing are thought to favour “Leave”, and the data and campaigns are directed at them. On the other hand, Remain is counting on “cosmopolitan, urban, younger and people with further / higher education qualifications”

6 & 7. Change the associations, shift the frame and take action

The last two steps outlined by Praet require a relentless, tireless and repetitive action, which is what both campaigns are doing.

To sum up, by appealing to System 1, Vote Leave has increased its chances dramatically, as many of the polls leading up to the EU Referendum are showing. 

Vote Remain – System 2 heavy, but huge System 1 asset

I’ve mentioned it before – the Vote Remain campaign addresses System 2. However, it’s interesting to notice that what they are actually campaigning for is strongly related to System 1 – status-quo.

Status-quo bias appears when “people prefer things to stay the same…or by sticking with a decision made previously. This is strongly related to loss aversion – the pain of losing is psychologically about twice as powerful as the pleasure of gaining, and since people are more willing to take risks to avoid a loss, loss aversion can explain differences in risk-seeking versus aversion”.

In their campaign so far they seem to have been focusing more on the losses – how the UK will be impacted by losing its membership to the EU. However, voters might have forgotten the fact that the Prime Minister has negotiated for a better, improved status-quo – an EU membership that would allow the UK to have a special place in the EU. This improved status-quo, if put into context, would be very likely to lead to a decoy effectChoices often occur relative to what is on offer rather than based on absolute preferences. The decoy effect is technically known as an ‘asymmetrically dominated choice’ and occurs when people’s preference for one option over another changes as a result of adding a third (similar but less attractive) option”.

It would be very interesting to see what results the referendum would have if three options were to be presented to the public on the ballot paper: 1. Remain in the EU as it is now (status-quo); 2. Remain in a reformed EU (improved status-quo); 3. Out of the EU. I have a strong feeling that the decoy effect would make it so that British voters would go for option number 2. In the end, who wouldn’t want to have their cake and eat it too?

So in the end, it’s almost like two battles are taking place. On the one hand, System 1 is battling System 2, but on the other, System 1 is going through an internal struggle as well, between status-quo bias, loss aversion and an emotional grip to a perceived lost identity.

On June 23rd, who will be stronger? Let me know what your predictions are…

Fast and slow thinking