The main thrust of behavioural economics is rooted in the idea that the decisions taken by human beings are mostly far from rational. If people make irrational decisions in normal circumstances, aberrant situations that create panic, anxiety and uncertainty may make things worse. The coronavirus-mooted public health emergency has resulted in unprecedented outcomes all over the world. The pandemic has caused severe economic impacts in both developing and developed countries, including massive job losses, closure of businesses and disruption in developmental activities. Building psychological resilience against an epidemic for which a cure has not been found yet is a struggle that people are grappling with right now.
Talking from a behavioural economics perspective, it is the cognitive biases that hinder our collective efforts in the fight against Covid-19. Cognitive biases or systematic errors in thinking often lead people to make illogical decisions. As the world awaits a vaccine, only a behavioural shift among people could help curb the spread of the pandemic. It is in this context that we should leverage the concepts in behavioural economics to coax people to display a desirable behaviour.
Choice architecture can play a major role in changing the behaviour of the people. Placing sanitisers in public places, giving masks for free or at a minimum price, providing physical distancing marks and signages, etc, could effectively nudge people to follow a desirable behaviour. Companies that have the provisions to give work from home possibilities should consider giving it as a default option to their employees. The fallacy of appeal to the authority could be effectually manipulated to change peoples’ behaviour by bringing in popular people like film stars, doctors with high repute to campaign on the importance of using masks, sanitisers and maintaining physicial distancing.
One of the most dangerous biases seen these days is the overconfidence bias. Put simply, it means the tendency of people to have a false, misleading assessment of one’s own skills and talents than an objectively reasonable level. Overconfidence bias gives unrealistic optimism to people making them think that they are less susceptible to deleterious outcomes. This bias can be quite dangerous in situations like a health emergency such as Covid-19. People may think that their chances of contracting the virus are relatively lesser than others. This will result in people taking things lightly, which in turn, could make the situation worse.
To tackle this bias, strict legal enforcements and subtle nudges need to be used hand in hand. The reluctance to wear masks in public places may be managed by the police using techniques based on the deterrence hypothesis. The authorities could consider measures like offering a mask to the violators at an exorbitant price. The price of the mask is, in fact, the penalty charged for not wearing a mask.
Nudges can be in the form of signages with illustrations that show the level of risk associated with contracting the virus in different settings such as restaurants, places for religious worships, amusement parks and beaches. Simple cartoons and illustrations showing the risks could be used in public places so that the idea may be conveyed across different age groups and people with different education levels. This prompts people to adhere to the safety measures wherever they go, which, in turn, reduces the chances of spreading the infection.
One thing to be noted here is that unnecessary fear is also dangerous as it affects the psychological resilience we are building against the pandemic. From a psychological perspective, building psychological resilience is important to keep calm. The intention is to make people cautious and not create panic. Studies have shown that unnecessary fear and anxiety have affected people’s mental health. Finding the fine line between fear and caution is the challenge. Measures like monitoring and curbing fake news on social media can help in managing panic.
Status Quo bias is mainly responsible for the violation of Covid-related rules. This is a cognitive bias characterised by peoples’ preference to stick on to the current state of affairs. It comes from a reluctance to accept change, which motivates people to make choices that are familiar. The consequences of status quo bias in a health emergency are that people may have a disinclination to change their existing lifestyle despite the changing circumstances. This poses a threat to the entire community.
There have been many cases regarding quarantine violations. This tendency could be attributed to the behaviour of the people to continue their normal lifestyle, or in other words, a kind of inertia that resists people from adapting to a new system.
Besides legal frameworks, the authorities could also consider positive reinforcements as a tool to handle these issues. This may include measures such as giving incentives to the people in quarantine to follow a desirable behaviour. One example would be offering monetary benefits to those who strictly follow the quarantine rules in a community through a lottery method. The lottery method ensures a fair chance to win for everyone who follows the rules. After examining the effectiveness of the experiment, unnecessary expenses incurred in law enforcement and policing could be brought down.
A few techniques already in practice to nudge people into adopting an acceptable behaviour are as follows. Cloth masks manufactured these days come in different designs that look attractive to different age groups. For youngsters, the masks look stylish which motivates them to put it on. This not only gives a sense of security to them but also keeps them trendy. Brands have also begun manufacturing face masks which attract their loyal customers to use them. For the aged groups who give more importance to utility rather than style, plain masks are available. Sanitisers manufactured in the form of toy bottles with attractive colours nudge children to disinfect hands using them.
(The author is Assistant Professor of Economics at Christ University, Bengaluru)
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