Inevitable or Fluid?

Is Obama inevitable? The results from the Iowa caucus is out and Obama wins! So what next? The process leading to the nomination of the presidential candidate is interesting from the perspective of decision making. The question to ask is what is the impact of the Iowa caucus on the rest of the primaries/caucuses?

Essentially the Iowa caucus sends a signal to the voters in other states. Consider that you are really bored at home and are faced with two options. You can either go for a music concert or a basketball game. You have limited information on either and hence ex-ante, do not have a preference. Both events are held at a common place (of course in two wings of a huge complex) and hence tickets are sold at the same place. There are 50 people ahead of you and you find that 40 choose to go to the music concert. Since the majority choose the music concert, your choice is concert over game. This is what is referred to as the theory of "information cascades". Essentially the argument is that individuals make decisions based on observed behavior of others and tend to ignore their own personal preferences/information in the process. Information cascades have been used to explain events such as financial contagion, market crashes etc.

How does the Iowa caucus create cascades? The argument is, since it is the first caucus and gives the earliest possible indicator of a candidate's standing, voters in other states, who do not have a particular preference or information to decide on their candidate might choose to follow the voters in Iowa. The Iowa caucus and New Hampshire primary are considered to sow the seeds of a potential cascade. Traditionally, the challengers/incumbents spend considerable resources in Iowa and New Hampshire to ensure an early advantage. Their actions tell us that they believe in the cascade theory. Why should this be the case? Can the information cascade be avoided? If the primary reason why the cascade affects likelihood of being elected is information, then why not spend time evenly on other states increasing the level of information and knowledge of those voters. Given that more information will lead them to making the right choices, the cascade will not be effective which is optimal.

Another option which can help prevent cascades is to hold primaries/caucuses simultaneously. Now potential voters do not have access to information regarding how voters in other states behave. The worry of a building cascade is probably lower in the year 2008 because of the projected super Tuesday effect. "...February 5, 2008, looks set to be a decisive date, one month before the traditional Super Tuesday, as up to twenty states, with half of the population of the United States among them, are moving to hold their primaries on what is being called Tsunami Tuesday, National Presidential Primary Day, Giga Tuesday, The Unofficial National Primary or Super Duper Tuesday..." Source: Wikipedia

This might prevent a cascade effect from playing an important part. But the Iowa and New Hampshire effect might be pervasive and cannot be ignored. Well, with one out of the way and the next one just down the road, all eyes are focused on New Hampshire. Will Clinton rock Obama's boat? This is a million dollar question!

Are we waiting for the inevitable or is the situation fluid? Wild/informed/analytical guesses are welcome!