Beliefs, Expectations, and Behavior in the Time of Corona

In this lecture, I cover several subjects that behavioral economists and psychologists have been mentioning recently as relevant to our topic. I warn in advance that we understand some of them better than we do others. For some we have slightly more persuasive findings than for others, so far. And in other cases, the research is in its infancy or has to date yielded mixed findings. I do not attempt to be comprehensive; I focus on those subjects closest to my own research interests. I also do not present a laundry list of do’s and don’ts; instead, what follows are interesting findings that should give us all food for thought. The first part of the lecture addresses several important phenomena that have been studied in the world of behavioral economics—and their possible manifestations in the time of corona. It begins with a brief discussion of what behavioral economics is and continues by offering a snapshot discussion of concepts such as reference points, loss aversion, probability weighting, present bias, and social visibility, among others, and of what they may have to do with the coronavirus era. The second and central part of the lecture is dedicated to expectations. My main message is that expectations, beliefs, confidence, sentiments, fears—all these things that we discuss with our psychologists as we lie on the couch—are objects that have lives of their own. They may even be something we can choose—consciously or not—rather than being merely a passive, mechanical implication of our environment and actions. The seemingly simple link from information to beliefs and expectations is neither self-evident nor, for the time being, well understood. I will also offer a taste of current research on the topic, and conclude with a word for Israel’s policymakers about transparency and communication with the public