Rick Perry: Investment Banker

Nate Silver tries to understand the rationale behind Governor Perry's decision to stay in the race and the different implications each scenario has for Perry's chances in South Carolina. In Silver's piece, there are two scenarios: one in which Perry makes a highly-informed decision based off of information that implies a comeback and one in which Perry makes a poorly-informed decision based off of a disconnect from reality.

However, a better way to analyze the decision may be to look at incentives - and in this analysis Rick Perry's incentive portfolio looks a lot like an investment banker's: little downside paired with large potential gains. First, like an investment banker, he's playing with other people's money. Second, given the structure of the Texas state government, it's not like he's missing out on pressing business in Austin. Third, he has no political capital at risk as he likely remains unpopular among many Republican state legislators and among many Texans in general.

As for potential gains, they do exist. South Carolina's Republican electorate matches closely with the Governor's key demographic: Southern Evangelicals. And, as Jonathan Martin points out (via Nate Silver), the party elite of the conservative wing of the Republican Party may not be fully convinced of Senator Santorum's ability to challenge Governor Romney over the long-haul, meaning a potential bump for Perry.

So what are the implications of this analysis? Well, nothing. All we see is an actor making rational decisions based off of imperfect information. Perry's decision to stay in the race doesn't mean that his campaign has some private information that says that his chances of winning South Carolina are good. It just means that he has no reason not to stay in the race and every reason to stay in the race.