NUDGED INTO LOCKDOWN? BEHAVIOURAL ECONOMICS, UNCERTAINTY AND COVID-19

This book is forthcoming from Edward Elgar in late 2021/early 2022. Elgar recently published another one of my books A Research Agenda in Experimental Economics.

Blurb

Relying on extensive research in economics, psychology, neuroscience and evolutionary theory, this book provides a critical perspective on the role of cognitive biases in decision-making during the recent Covid-19 pandemic; particularly the extensive use of and support for stringent social distancing measures.

Synopsis

Pandemics such as Covid-19 generate significant uncertainty; something humans are not comfortable with since we crave certainty. Uncertainty leads to feelings of fear, stress, anxiety; a sense of having  lost control of our own destiny. This, in turn, leads to a degree of irrationality both in the public’s perception of the problem as well as policy responses. In responding to the crisis, countries around the world resorted to the extensive use of stringent social distancing measures in the form of lockdowns. Available evidence suggests that the aggregate costs of such lockdowns greatly exceed the aggregate benefits. This is likely true for the rich, industrialized societies of the West with their relatively older population and is certainly true for developing nations, whose populations skew younger. There was inadequate recognition of the fact that stringent social distancing measures involved significant trade-offs: between lives lost to Covid-19 and lives lost from other diseases as we diverted resources away from them, lower national output, bankrupt businesses and higher unemployment, not to mention the emotional trauma, for instance, among children denied the ability to go to school. Yet, these measures that imposed unprecedented restrictions on our economic and social lives and liberties were accepted with few counter-arguments. Relying on extensive research in economics, psychology, neuroscience and evolutionary theory, this book provides a critical perspective on the near unanimous support for lockdowns and the role of cognitive biases in policy-responses across the world. The book should be essential reading for anyone who is interested in learning more about the science of decision-making during times of crises and lessons for future pandemics and/or crises.  

Endorsements (in progress):

In responding to the novel coronavirus pandemic, most governments abandoned the existing scientific and policy consensus and mimicked one another to embrace lockdowns of varying stringency. Remarkably, hardly any seemed to produce cost-benefit analysis. Unremarkably, the cost-benefit balance varied between rich and poor countries. In this rigorous, multi-disciplinary examination written in clearly accessible language, Professor Chaudhuri explores the reasons for the herd-like behaviour by governments and for the public compliance with their edicts. A must-read for understanding what really happened with COVID-19 and why, and for being better prepared for the inevitable next pandemic.

Ramesh Thakur; Director of the Centre for Nuclear Non-Proliferation and Disarmament (CNND), Crawford School, The Australian National University; Vice Rector and Senior Vice Rector of the United Nations University and Assistant Secretary-General of the United Nations 1998–2007.

This book is at once scholarly and readily accessible to all.  The case Chaudhuri makes is not for any specific policy response, but rather for rational and fully informed decisions – for epidemiology over ideology.  If the careful logic and vivid illustrations here pry open enough minds, we will be far better prepared for the next great public health crisis than we were for COVID19.

David L. Katz, MD, MPH; President, True Health Initiative; Founding Director, Yale-Griffin Prevention Research Center; Yale University, 1998-2019

In response to the Covid pandemic, many countries adopted containment policies that did not condition on peoples’ health status or demographic characteristics. This timely and insightful book addresses the questions of what considerations led to those policies and whether those policies were well-informed. The book begins from premise that the design of effective policy cannot be based solely on the insights of classic epidemiology models. The reason is both simple and sensible: those models don’t take into account behavioral responses of people to policies like containment. The author’s analysis is multidisciplinary in nature, blending economics, psychology, political science and epidemiology. The result is a rich and informative analysis. I highly recommend this well written and timely book.

Martin Eichenbaum; Charles Moskos Professor of Economics; Co-Director, Center for International Macroeconomics, Northwestern University

This book is a very timely one for those, like me, who believe the democratic world’s lockdown response to the Covid virus will go down as the worst public policy response of the last few centuries.  It is sceptical.  It is interesting.  It is Great Barrington over Chief Medical Officer.  There is more to living and the good life than fear of dying of Covid.  All the politicians who focused on that matrix, and ignored other causes of death as well as all the benefits of living in a free society, and more, should have to read this book.

James Allan; Garrick Professor in Law, TC Beirne School of Law; University of Queensland

Careful comparison of costs and benefits is usually considered a hallmark of wise decision-making. Yet in 2020 many governments abandoned this standard as they tried to minimize

deaths from Covid-19 regardless of cost. Traditional cost-benefit arguments were rebuked, by politicians who by nature rarely admit error, but also by ordinary folk affronted that someone would want to ‘kill granny’. This book draws insights from experimental economics, political science and psychology to show how various biases in decision-making processes contributed to this situation. Fifty years ago, Essence of Decision lead a generation of scholars to examine models of government decision-making. Hopefully Ananish Chaudhuri’s lively book has a similar impact, for scholars, students and members of the public concerned about the retreat from rationality that is revealed by policy choices and public attitudes in the Covid-19 era.

John Gibson, Professor of Economics, University of Waikato; Fellow of the Royal Society of New Zealand; Distinguished Fellow of the New Zealand Association of Economists

This is an excellent book that nicely discusses cutting-edge applications in behavioural economics pertaining to the Covid-19 pandemic. It is thought-provoking and contains pioneering approaches that broaden the scope of behavioural research. Excellent writing style, making the content of the book accessible to a broad audience. Highly recommended!

            Michalis Drouvelis; Professor of Economics, University of Birmingham; Co-ordinating Editor, Theory and Decision

In this book Ananish Chaudhuri achieves the impossible – he offers an easy to read book that delivers profound insights about our behavior which applies not just to pandemics, but to many other recurrent situations in our daily lives! A must read for anyone that wants to make better decisions.

Sudipta Sarangi; Professor and Chair, Department of Economics, Virginia Tech; Co-Editor, Journal of Economic Behavior and Organization; Author of “The Economics of Small Things”

In New Zealand now it is hard to remember the shock of lockdown as a pandemic response. So much has happened. The virus has been kept at bay, so far. The predicted economic disaster has not happened – yet. Massive financial relief for businesses forcibly suspended and jobs at risk was followed by a rapid recovery when shops reopened. But Ananish Chaudhuri is by no means alone in thinking the country could pay a high and lingering price for its unprecedented lockdown, and that these costs, especially the human costs, should have been weighed against the risks the virus posed. His book uses fascinating behavioural studies of economic decision making and the psychology of popular risk assessment to question the merits of measures that New Zealand’s Government took and New Zealanders overwhelmingly accepted. They should read this book and wonder if these were questions they should have asked.

John Roughan, Political Columnist, New Zealand Herald