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Subjective beliefs and economic preferences during the COVID-19 pandemic

Published online by Cambridge University Press:  14 March 2025

Glenn W. Harrison Open the ORCID record for Glenn W. Harrison [Opens in a new window] ,
Andre Hofmeyr Open the ORCID record for Andre Hofmeyr [Opens in a new window] ,
Harold Kincaid Open the ORCID record for Harold Kincaid [Opens in a new window] ,
Brian Monroe Open the ORCID record for Brian Monroe [Opens in a new window] ,
Don Ross Open the ORCID record for Don Ross [Opens in a new window] ,
Mark Schneider Open the ORCID record for Mark Schneider [Opens in a new window]  and
J. Todd Swarthout Open the ORCID record for J. Todd Swarthout [Opens in a new window]
Glenn W. Harrison*
Affiliation:
Department of Risk Management and Insurance, Robinson College of Business, Georgia State University, Atlanta, USA Center for the Economic Analysis of Risk, Robinson College of Business, Georgia State University, Atlanta, USA School of Economics, University of Cape Town, Cape Town, South Africa
Andre Hofmeyr*
Affiliation:
School of Economics, University of Cape Town, Cape Town, South Africa Research Unit in Behavioural Economics and Neuroeconomics, University of Cape Town, Cape Town, South Africa
Harold Kincaid*
Affiliation:
School of Economics, University of Cape Town, Cape Town, South Africa Research Unit in Behavioural Economics and Neuroeconomics, University of Cape Town, Cape Town, South Africa
Brian Monroe*
Affiliation:
School of Philosophy and School of Economics, University College Dublin, Dublin, Ireland
Don Ross*
Affiliation:
Center for the Economic Analysis of Risk, Robinson College of Business, Georgia State University, Atlanta, USA School of Economics, University of Cape Town, Cape Town, South Africa Research Unit in Behavioural Economics and Neuroeconomics, University of Cape Town, Cape Town, South Africa School of Society, Politics and Ethics, University College Cork, Cork, Ireland
Mark Schneider*
Affiliation:
Center for the Economic Analysis of Risk, Robinson College of Business, Georgia State University, Atlanta, USA
J. Todd Swarthout*
Affiliation:
Center for the Economic Analysis of Risk, Robinson College of Business, Georgia State University, Atlanta, USA Department of Economics and Experimental Economics Center (ExCEN), Andrew Young School of Policy Studies, Georgia State University, Atlanta, USA
*
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
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Abstract

The COVID-19 pandemic presents a remarkable opportunity to put to work all of the research that has been undertaken in past decades on the elicitation and structural estimation of subjective belief distributions as well as preferences over atemporal risk, patience, and intertemporal risk. As contributors to elements of that research in laboratories and the field, we drew together those methods and applied them to an online, incentivized experiment in the United States. We have two major findings. First, the atemporal risk premium during the COVID-19 pandemic appeared to change significantly compared to before the pandemic, consistent with theoretical results of the effect of increased background risk on foreground risk attitudes. Second, subjective beliefs about the cumulative level of deaths evolved dramatically over the period between May and November 2020, a volatile one in terms of the background evolution of the pandemic.

Keywords

COVID-19Risk preferencesTime preferencesSubjective beliefs

JEL classification

I18: Government Policy • Regulation • Public Health C91: Laboratory, Individual Behavior I12: Health Behavior D81: Criteria for Decision-Making under Risk and Uncertainty D83: Search • Learning • Information and Knowledge • Communication • Belief • Unawareness
Type
Original Paper
Information
Experimental Economics , Volume 25 , Issue 3 , June 2022 , pp. 795 - 823
Copyright
Copyright © The Author(s), under exclusive licence to Economic Science Association 2021

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Footnotes

Supplementary Information The online version contains supplementary material available at https://doi.org/10.1007/s10683-021-09738-3.

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