On Decision Making in a Global Pandemic

Until January 2020, anthropogenic climate change was the most clear and present danger facing human civilization. We were told we had to act soon and we had to act collectively to avoid the worst effects of increasing global temperatures, and by all accounts, we still have to. All the concerns around decision making at different levels, from individual to inter-governmental, that have fuelled the climate change debate have been brought into sharper focus by the unfolding Corona Virus pandemic. The questions are similar, but the timeline is much more compressed. 

What you or your government does or does not do today has an impact today, not 25 years into the future. Predictions can be substantiated or be shown to be worthless in a matter of days. And the decisions which rely on and simultaneously impact these predictions have to be made in an environment that is constantly evolving. Uncertainty abounds and the need to establish paradigms of sound decision making has scarcely ever been as urgent as it is today. This makes it imperative to revisit the basic, time tested principles of incentives and tradeoffs that underlie the choices we make. 

Context

As recently as a week ago, Coronavirus seemed a distant concern that only paranoid bothered with. 

In fact, on the 18th of March, I had received an email from an American colleague with the subject line: "While the world panics, India seems to be doing just fine. Yes?". And it did indeed look like we were doing fine. The confirmed case numbers were very low, governments had not taken any directed measures and while the university I work at had suspended classes, there was more of a holiday mood all around. But to anyone looking at the numbers more carefully, the prognosis was not very bright. I had responded to my colleague's question with a doom and gloom prediction (which I do not think it would be wise to share at this point in time) half hoping for some directives from the government. 

On 20th March we got the first clear sign of government action. The Prime Minister asked all Indians to observe a 'people's curfew' on 22nd March from 0700 hrs to 2100 hrs. He also asked everyone to engage in a collective show of solidarity with the women and men at the frontline of the crisis by clapping or clanging plates for 5 mins at 1700 hrs. Many praised the PM's initiative to unite the country and rekindle the spirit of lending a hand like the wars of 65 and 71. Many others lamented the gesture as a case of too little, too late, with particular consternation at the over-enthusiastic groups of people who took their show of solidarity to the streets or worse, celebrated their contribution to the nation's cause by having a post-curfew party. 

On the day of the people's curfew, many state governments announced lockdowns, taking many by surprise. Since then a nation-wide 21 days curfew has been declared and the government machinery which until then seemed intent on avoiding panic sprung into action. Though it still seemed incapable of grasping the magnitude of the challenge before them, possibly handicapped by the old dictum of the British system of bureaucracy: lots of things should be done, but nothing should be done for the first time.   

Individual's decision problem

As a species that evolved to survive the African savanna, we tend to seek comfort in groups. This instinct serves us well in times of danger. But congregating in groups is exactly what we have been asked no to do in order to limit the spread of the virus. So before we get into the nitty-gritty of the tough decisions that individuals have to make it is important to concede that the present crisis challenges ingrained habits and the road ahead is going to be very difficult. 

The WHO guidelines on what is expected of individuals are pretty clear, however, they are not straightforward to adhere to. For instance, it is almost impossible to not touch your face or keep away from surfaces that might have been touched by others. Hence, we had more the more severe, but easier to implement measure of quarantining people. The severity of the quarantine was sequentially increased from being initially restricted to high-risk cases to a generalized lockdown. The increase in severity of the measures has at least partly driven by the inability or unwillingness of individuals to adhere by the less severe ones.    

Why is it that even in the face of a demonstrable threat, people have not taken adequate precautions: violated quarantine, traveled long-distance, even partied? The choice boils down to the individual perception of the opportunity cost of being locked indoors. For instance, if none of my friends have to go to the office, more people can join my party, increasing its payoff and consequently increasing the opportunity cost of maintaining quarantine. On the other hand, the opportunity cost of partying is the increase in the probability of the individual getting infected with a deadly virus due to attending a party. But before we pontificate on the obviousness of choosing to avoid a party in these times, consider that on average 10 people die every day on the railway tracks of Mumbai's suburban railway. Our subjective perception is not very well tuned into evaluating the probability of our own mortality, leading to many flawed decisions. We will revisit this problem of errors in estimation in the next section. 

   

Further, it is obvious that the impact of the decisions made by individuals is not limited to the decision-makers. If a person had increased their risk of infection, they have joined the chain of infection, becoming a potential vector that increases the probability of others being infected. This (negative) externality whereby the choices of an individual affect others; complicates decision even more as the social cost of an action, say organizing a party, is much higher than its personal cost. The standard prediction of an introduction to economics course in such a scenario would be that people will over-engage in such activities. Climate activists have been pointing out a similar problem, where individuals consume more fossil fuel than is socially optimal as the cost they pay individually does not reflect the cost their decision imposes on the entire society.  

So, the deck is stacked against us (1) we need to do things that go against our basic instincts (2) we seem to have limited ability to gauge the cost of an activity in terms of probability of mortality (3) even if we can take our own mortality into consideration, our decisions impose costs on society that are difficult to estimate. It is for these reasons that governments across the world, given the urgency of the situation have now started introducing the extraneous cost of fines and/or punishment to get people to comply. From the UK to Germany to India, law enforcement agencies are being empowered to make sure that people comply with lockdowns. We have forfeited our freedom to make independent decisions and in the process demonstrated our inability to deal with immediate and urgent threats as individuals. 

The way forward

France has its army policing the streets of Paris and this might very soon be a reality for the big cities in India. But while their presence will be deterrent, it will not completely eliminate the possibility of individuals violating the lockdown. They are not omnipresent and there will be opportunities that can be exploited by sufficient motivated individuals: those for whom the opportunity cost of social isolation is very high. 

Now, particularly in a poor country like India, there is going to be a very large group of daily wage earners for whom the cost of a lockdown is going to be very extreme. As we get deeper into the lockdown, even people with monetary resources will start running out of food. The arrangements that governments are making might help some, but if the initial reports are anything to go by, there is insufficient state capacity to provide food materials to millions of people. If the lockdown extends for any longer than the current 21 days, well, we might be getting too ahead of ourselves with that hypothetical. But if the choice is between increasing the probability of getting infected and starvation, it is not too difficult to imagine what even the most level headed amongst us would choose to do.  

For now, it is imperative to recognize the failings in decision making that led us to this situation and make amends, to the extent that we can. Our estimations of incentives and tradeoffs depend on the assumptions we about the repercussions of a decision, so it is relevant to identify the ways in which they can go wrong. Consider the following situation: person A is in a cave, A's decision to leave the case depends on whether there is a tiger outside the cave. There are two possible kinds of errors that A can make: (1) assume that there is a tiger outside the cave when there isn't one (2) assume that there is no tiger when there is one. A reasonable argument can be made that error (2) is far more dangerous.  And therefore it is very likely that we evolved to avoid making the (2) type of error, erring more on the side of being cautious than cavalier. While that may be true of the species generally, in our tendency to commit (2) errors, we are likely distributed over a spectrum ranging from extreme paranoia to extreme risk-taking. This is why even under normal everyday circumstances we observe a disparate range of responses to the same situation. The same tendency that makes someone a risk-taking entrepreneur, also makes them take more risky decisions in times like these. 

In addition to the extreme risk-takers, there is also the fact that modern civilization has created an environment in which (2) type errors are not as risky as they would have been in times gone by. This is not a critique the advances that we have made in modern medicine, engineering, and governance structures, it is merely to point out that by reducing the cost of errors we have made people more likely to make errors even in times when the cost is likely to be very high. And while this is more true in the richer countries, the well off in the global south has not been immune to these changes. In the last few days, there were exhortations by the ones in the know to their near and dear ones to buy basic food items. But in times of Amazon pantry and Bigbasket, it is so difficult for people to imagine food shortages, that many ignored the advice, only to find themselves in a perilous situation with the implementation of the lockdown. It seems that paradoxically, the progress of human civilization might have created an environment that endangered its further progress. 

How do we address this? Possibly the best way forward is to at least in the current scenario: (a) try to consciously move toward the paranoid end of the scale (b) try to maximize considerations of social costs of your actions by thinking of people around you who your actions might immediately impact. Listen to interviews of experts who have been shouting their lungs out for the last 2 months (an example: https://www.youtube.com/watch?v=dcJDpV-igjs). With the proliferation of the internet, there seems to have been a growing distaste for experts, people who have dedicated many years to understanding and addressing a particular problem. Now may not be the best time to undermine the importance and relevance of knowledge accumulated by the experts. Listen to the stories coming in from Italy and Spain imploring the rest of the world to not make the kind of mistake they made. 

Can the experts be wrong? Of course, the increasing temperatures might yet drive the virus away or maybe the threat was overstated. While no one can guarantee with absolute certainty that the experts have not committed an error of type (1): they have said there is a tiger, when there isn't. And if that is the case, we will find out soon enough. But, if they are right and we commit an error of type (2), the consequences might be too catastrophic to consider. 

Stay at home, stay safe.