The visible hand in economics

Nationalism, the All Blacks, and the 2007 World Cup

Posted on: October 9, 2007

Now remember, I hate nationalism. However, when I wrote this I found I was being strangely defensive of New Zealand. This made me realise that nationalism is just something that happens to people, often people aren’t explicitly trying to be nationalistic, society is just influencing the persons preferences in such a way that they become biased towards that nation.

After the recent loss by the All Blacks, a psychologist said that this was a ‘blow to the Kiwi tribe”. This idea has been criticised here, and in an update here. In the first criticisim the author says that he doesn’t feel like it’s the end of the world, therefore the psychologist is wrong. He seems to think that this influence on society may have existed 30 years ago, but not now. The second criticisim is from an author here. I agree with their article, that people mis-use statistics in order to make up stories.

Now I agree with the criticism raised by the second author (of course 😉 ), it seems strange to make such sweeping statements of national identity without evidence. However, at some level I think that the psychologist may have a point, albeit an obvious and not particularly enlightening one.

The psychologist is saying that there is a group that sees themselves as New Zealanders, and this group also feels very strongly about rugby. I agree that there are large numbers of people that do not associate themselves with this, however this group does exist. Furthermore, the importance of rugby to ‘New Zealanders’ is often placed on TV, taught in schools, and for someone who is brought up in NZ it does form part of the way that they identify the society that surrounds them.

In some sense, an individual’s preferences are partially endogenously defined by the society they grew up in. So even though a person makes choices based on their preferences, their preferences are a function of the way society is shaped. In this case a social event that occurs when an individual makes a utility maximising decision can influence the choice both by influencing the structure of the game or by changing the individuals’ preferences. Examples of this are:

  1. The values of the group you associate with are included directly in your own preferences. So when the NZ rugby team loses you as you feel like part of the team that did the losing.
  2. Although you do not have a preference over which team would win, you still want to function well in society. If you expect that an All Black loss changes the utility function and choices of other agents in the game, then you will respond by changing your behaviour

The first case is an example of when society defines an individual’s preferences. The second case is an example of when an individual will change their behaviour based on the belief of how other agents will react.

The idea of a ‘blow to the kiwi tribe’ relies on the fact that some individuals will take the result of the All Blacks game in the first sort of way. The loss of a rugby game must influence some New Zealanders preference set. Once we know that the loss of a game can influence the preference set of part of a given group, there is a case for other agents to change their behaviour as a result of the event, since the event will affect their expectations of the choice made by other agents. Ultimately, for there to be a ‘blow to the kiwi tribe’ the social event must provide a negative payoff from the part of an individuals preferences that are determined by society. I am not sure that the new social equilibrium post game must provide less ‘welfare’ than the pre-game social equilibrium, however I suspect in most cases it will be.

I prefer soccer to rugby by a mile, but I still felt hurt when the All Blacks were knocked out. As a result, on a personal level I can understand where this result the psychologist was discussing comes from. However, as the second author implied, it is sort of silly to make blanket statements without any evidence, especially when the above problem is likely to be full of assumptions that require us to assume cardinal utility! As a result, I don’t think it is appropriate to go from how the All Black loss affected me to how the All Black loss has influenced society.  This is the mistake the psychologist seems to have made.

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