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Prospect Theory Shows How Confusion During a Pandemic Is Bad for Health

Prospect Theory Shows How Confusion During a Pandemic Is Bad for Health

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Unscientific statements and irresponsible behaviour by influential people, including politicians, has often weakened our response to the COVID-19 pandemic. It is difficult to calculate the possible impact of irresponsible behaviour by influential people on the pandemic’s spread at this stage, but scientific experiments on human subjects suggest that the impact can be negative. Unscientific and unqualified statements and posturing may create confusion in the general public and may slacken efforts put together to follow norms such as wearing masks, maintaining social distancing and avoiding public gathering.

More the confusion created by influential people, the more chance there is that people take public healthcare advice less seriously, and instead think it is only a matter of time before they get infected. Indeed, people may select the riskier option of not following the suggested practices, believing that it might be possible to wriggle out of it with a bit of luck. Compliance has its own costs – both direct and indirect. Direct costs could include loss of income and cost of PPE. Indirect costs could be discomfort while following the practices. So there is always a temptation to flout the norms.

The prospect theory of Daniel Kahneman and Amos Tversky could help clarify the picture here. Say there are two options before an individual: a 100% chance of losing Rs 500 and a 50% chance of losing Rs 1,000. Kahneman and Tversky conducted experiments on around 70 individuals, many of them are top university students in the US, asking them to choose one of the options. They observed that a majority picked the 50% chance of losing Rs 1,000.

This doesn’t mean people always pick the riskier option. For example, Kahneman and Tversky also conducted a similar experiment in which the options were 100% chance of gaining Rs 500 and a 50% chance of gaining Rs 1,000. They found that an overwhelming majority picked the 100% chance of gaining Rs 500. Here, individuals preferred certainty over uncertainty, even if the gains under uncertainty were twice as high.

Had the participants been fully rational, they would have weighted the options equally – but that wasn’t the case. Individuals weigh decisions according to the stated probability of each outcome, and the weight is generally lower than the stated probability. And simply put, a decision-maker would assign a weight of less than 50% for a 50% chance of winning or losing.

The underweighting of the stated probability of gains/losses has been observed with moderate and high probability. This has many implications for individual decisions about whether to follow certain norms. As the novel coronavirus spreads across the country, the probability of contracting the disease is understood to be moderate or high. Due to underweighting, the expected loss by adopting riskier options is lower than a certain loss to be incurred by the following norms. As a result, individuals may choose a higher uncertain loss – i.e. they may not wear a mask sometimes, may not practice physical-distancing or may not avoid indoor gatherings.

In people’s minds, the stated probability of being affected by the coronavirus is based on perceptions at best. If they read messages published by influential people that give the impression that there is only a moderate chance of being affected by not following the guidelines, their perceived chance of contracting COVID-19 falls. On the other hand, when they observe guidelines, it’s because their perceived chance of getting COVID-19 is very high. Given these two options, people will pick the first.

Axiomatically, influential people should stop issuing confusing or confused statements about COVID-19 and should desist from behaving irresponsibly in public. Instead, they should rather endeavour to disseminate correct information no matter how intimidating it may be.

For example, the recent announcement by Kerala government, that community transmission of the novel coronavirus could likely be underway in the state’s coastal areas, was the right step. On the other hand, the results of rapid antigen tests – which have a high false negatives rate – can provide a false sense of security by lowering the perceived probability of being infected. So communicators should privilege RT-PCR test results for broadcasting because they’re more reliable.

Such responsible behaviour can nudge non-experts to following the prescribed practices to contain the pandemic.

Indranil De is an associate professor at the Institute of Rural Management, Anand. The views expressed here are the author’s own.

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