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    {\bf  Review of  Timur Kuran, {\it Private Truths, Public Lies: The Social 
Consequences of Preference Falsification} (Harvard University Press, Cambridge, 
Mass.,  1995)   pp. 423, index,    (forthcoming, {\it Journal of Economic 
Behavior and Organization}  }\\
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December 12, 1996

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                    Eric Rasmusen \\
                  
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\hspace*{20pt}	  	  Indiana University
School of Business, Rm. 456,   
  10th Street  and Fee Lane,
  Bloomington, Indiana, 47405-1701.
  Office: (812) 855-9219.   Fax: 812-855-3354. Email: Erasmuse@indiana.edu.\\ 
           
 

  
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    Some  subjects   are  appropriate  for book-length treatment because many 
little ideas need to be  put together into a big picture. Other subjects are  
appropriate because  one big idea needs  the emphasis that a book's length 
provides, even though the idea itself can be expressed very concisely.  This 
book falls into the second category. 

 The  one big idea is that  every person, in considering his preferences over a 
range from 0 to 100,  considers  three kinds of    utility. His intrinsic 
utility is  maximized at  the point he would actually like to be chosen--- 30, 
let us say.  His expressive utility is   maximized at the point  he would like 
to  choose to ``cultivate his individuality''   in his ``quest for autonomy.''  
Professor Kuran assumes that this will also be 30. Finally, our person's  
reputational utility is  maximized at  the point which, will result in the most 
desirable responses from the rest of society  if he publicly declares it,  
independently of any effect  his declaration has on the actual outcome.  If this 
point is 70, then our individual's actual declaration    may be 30,  if he cares 
little   for reputation, or 70, if he does not think he can affect the outcome 
and cares little about expressing his truthful preferences. More likely, it will 
be    somewhere in between,  if he gives weight to all three considerations. 

 A subsidiary idea, from which many of the conclusions flow, is that  for each 
person there is a {\it political threshold}:  the level of mean public opinion 
that makes the person indifferent between publicly  supporting the extremes of 0 
and 100.   If my intrinsic utility is highest at 20, for example, then it may be 
that if everyone else supported 59,  I would cast my vote for 0, but if they 
supported  60, I would switch to 100.  The implicit reasoning behind this idea 
is that reputational utility is maximized by choosing what other people choose.   
Since my position is   itself  one determinant of public opinion, this opens the 
way to multiple self-fulfilling equilibria and sudden, discontinuous  shifts of 
public opinion  when a few people change their behavior.  

   Much of the book discusses  recent historical events in terms of  the effects 
of   political thresholds.    The three chief examples are attitudes towards 
Communism in Eastern Europe, towards caste in India, and towards affirmative 
action in the United States.   In different ways, these illlustrate people's  
reluctance to  express a certain position unless others express it too.  
 
Unfortunately, the formal  model fades into the background in these later 
chapters.  The  discussions could   perhaps have   been sharpened  and the model   
better explained  by   accompanying the narration  with   numerical examples.     
Political scientists may wish to  follow up on this, since it offers a 
suggestion for parameterizing public and private opinion  separately during the  
crucial weeks of revolutionary change.  

    Professor Kuran has  collected a large number of interesting and  citable  
examples from politics, history and   psychology.  In  the Asch Experiment, a 
subject  is  asked to   match which of two lines were of the same length, where 
the answer  is quite obvious.   When confederates of the  experimenter  gave the 
wrong answer before the subject was asked to express an opinion,   32 percent of  
the genuine subjects imitated the wrong answer.      When white Americans were 
asked their opinion  of blacks  after being asked about affirmative action,  46 
percent used the term ``irresponsible'', whereas only 23 percent did  when the 
order of questions was reversed.       Public discourse can be categorized 
between     the {\it thinkable} and the {\it unthinkable} and the {\it thought} 
and {\it unthought}, suggests  Mohammed Arkoun.   These tidbits, from pages 27, 
140, and 176, are just a few examples of what one may pick up from this book.   
They are one of  its chief  delights, and I only regret that the book makes it 
more difficult to use them by employing endnotes instead of footnotes. 
   
   Much work remains to be done
 on the underpinnings of the basic  ideas of intrinsic, expressive, and 
reputational utility, which are for the most part taken as given in this book.  
Expressive utility is problematic. Many people  do not care to express 
themselves in the slightest.  Of those that do, it is not at all clear that they 
would choose the point with the highest intrinsic utility.  Individuality is, 
after all, cultivated by differentiating oneself, and what if everyone else 
values 30 too? Should I then  shout `'100!'' ?

A more universal desire, which also can explain one's desire to express oneself,  
is that one hopes to actually influence the decision.   Perhaps people vote in 
presidential elections purely to express their personal autonomy, but in  
smaller groups they know that their speeches and votes may well be decisive for 
the outcome.   
This is  still distinct from instrinsic or    reputational utility.   In order 
to influence the outcome,  I might  support a position that would not maximize  
my intrinsic utility.  This could take the form either of exaggerating or 
concealing  the extremism  of my position. In so doing, I might also be willing 
to harm my reputation,  since  extremism  is often unpopular but effective in 
creating political change.  

 
Also neglected are the underpinnings of reputational utility.  Why, exactly, do 
other people care about my   preferences, or is it really only  my public 
declaration  that  they care about?    Going the other way:  what if I learn 
about my own intrinsic utility from other's opinions? I may wish to conform to 
the opinions of others not because I want them to respect me, but because I 
trust their judgment more than my own, as when a supper party  in a Korean 
restaurant defers to  one person's judgment in selecting dishes. The theory of  
informational cascades developed by  Bikhchandani, Hirshleifer, and Welch   
(1994) which  formalizes this   idea is mentioned, but the idea is not fully 
linked into the    three-part division of utility.        

  Another idea only loosely touched upon is  how pressure groups form.  If one 
wishes to form a group to support a position of 100, how inclusive ought it to 
be? Should it include only people from 90 to 100,  or everyone from 50 to 100?   
Much of the answer will depend on what drives the group's positions:  the 
intrinsic utilities of the members,  or the reputational utilities the group   
imposes on those who join it.  Clearly,  {\it Private Lies, Public Truths}   has 
the virtue of opening up numerous avenues for future research. 
 
  More generally, {\it Private Lies, Public Truths}  is a reminder to economists 
that  there is more to externalities  than  price changes and sulfur dioxide.  
People are linked through  their  public expressions, both because public 
expressions lead to public decisions and because  we  genuinely care about what 
other people think,  and what other people think about us.  The efficiency 
implications are so messy that  one's  first  reaction is to turn  away in 
economistical horror,  but   the complexity may make   economic tools   all the 
more useful.
 

   Perhaps the most important lesson of the book   is not for the economist as  
scholar,  however,  but as   citizen of     city,   country, and university.   
That lesson is that  one man's opinion can  have an influence all out of 
proportion to his personal  importance, by  emboldening his less timid fellows 
to express similar opinions .  Everyone needs to understand why that is 
important, and  why  most people are  cautious, concealing their opinions for 
reasons that are sensible,   if inglorious.   


 
  REVIEWER: Eric Rasmusen

Indiana University School of Business.

	Indiana University School of Business  Rm. 456,   
  10th Street  and Fee Lane,
  Bloomington, Indiana, 47405-1701.
  Office: (812) 855-9219.   Fax: 812-855-3354. Email: Erasmuse@indiana.edu.  
 
(A reference page follows)

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REFERENCES

 Bikhchandani, Sushil, David Hirshleifer, and Ivo Welch, 1992,  A Theory of 
Fads,  Fashion, Custom, and Cultural Change as Informational Cascades, Journal 
of Political Economy,  94, 749-775. 



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