Patrick Carroll:

There’s an awful lot these days that can rightly be called “unprecedented.” Whether it’s the pandemic itself, the government lockdowns, or the massive bailout programs, it seems like everything we’re contending with is unexplored territory.

The hardest part about having no precedent is that it complicates the decision-making process. Normally, precedent acts as a guide that helps us determine our approach, and it plays a vital role in simplifying the decisions we face. In these times, however, the absence of precedent has made us desperate for simplicity, and in our desperation, I believe we have subconsciously succumbed to our natural predilection for mental shortcuts, also known as cognitive biases.

The study of cognitive biases is fascinating, but also unsettling. Increasingly, researchers are realizing that our biases cause significant errors in judgment, often more than we realize. In light of this, I think it’s worth taking some time to reflect on how our biases have influenced our response to this pandemic. To this end, let’s start by thinking back to when this whole fiasco began.

Before the Lockdowns

Back in mid-March, a number of biases played a role in shaping our initial response. One of the most significant biases in this regard was the availability heuristic. First described by Kahneman and Tversky in 1973, the availability heuristic is the tendency to misjudge the importance, frequency, or likelihood of events by giving excessive weight to events that are easier to recall (such as events that are more recent). This concept is closely related to salience bias, which is the tendency to focus on things that are more prominent or vivid and ignore things that are inconspicuous.

When considering the events leading up to the lockdowns, it’s not hard to see how these biases were at play. The imminent danger of a global pandemic dominated the media discourse in a matter of days, so it makes sense that we gave it a lot of attention.

But while COVID-19 infections and deaths were widely publicized and therefore widely salient, the negative impacts of the impending lockdowns went largely unnoticed. In fact, the disregard for these impacts eventually got so perilous that a group of over 600 physicians sent a letter to President Trump warning about “the exponentially growing negative health consequences of the national shutdown,” and pointing out that “the downstream health effects…are being massively underestimated and under-reported”.

The unintended consequences of the lockdowns have proven to be a sobering reminder of what can happen when we fail to look beyond the immediate intentions of narrow-minded policies. Indeed, this shortsightedness is the very thing Hazlitt warned us about in his book, Economics In One Lesson. But even though our blindness to these secondary effects is natural and understandable, it is by no means inevitable. We are perfectly capable of seeing the unseen so long as we remember to look.

Another consequence of the media’s preoccupation with COVID-19 is that we quickly became familiar with a host of ominous projections. This familiarity likely produced an illusory truth effect, which is the tendency to believe information to be true as a result of repeated exposure, even if it turns out to be false. On top of that, many people developed exaggerated expectations (arguably another bias) and displayed a great deal of overconfidence and hubris.

Finally, as more and more people bought into the alarmist narrative, there was an ever-increasing amount of availability, salience, repetition, and overconfidence. The ensuing positive feedback loop was inexorable, as was the corresponding bandwagon effect.

During the Lockdowns

A few weeks after the lockdowns were imposed it became apparent that the curve had been flattened and the extreme risk had subsided. But as weeks turned into months, the bureaucrats were incredibly reluctant to lift the lockdowns, and when they finally did it was a slow and gradual process. But why was that? Well, the official answer is that they were concerned for our health (unintended consequences be damned), but I think there’s another factor involved called status quo bias.

Status quo bias is our inclination to prefer the current state of affairs and avoid change. To be sure, it didn’t stop the politicians from imposing the lockdowns in the first place, largely because other factors took precedence. But once the lockdowns were imposed, they became the new status quo, the “new normal,” and this meant that there was now a psychological resistance to removing them.

Many explanations for status quo bias have been proposed, and it’s likely that they each contribute to varying degrees. Some of the more common explanations are loss aversion, omission bias, and the sunk-cost fallacy. Let’s briefly explore these in turn.

Loss aversion is the idea that we generally prefer avoiding losses to acquiring equivalent gains. What this means practically is that we often reject a change on account of its potential drawbacks, even if they are outweighed by its potential benefits.

Another explanation is omission bias, which is our proclivity to favor acts of omission over acts of commission. In the trolley problem, for instance, people feel more justified in allowing harm to happen than in actively causing harm. This preference for inaction seems to reflect an underlying moral sentiment, but it may also involve a fear of regret, since we might expect to regret our actions more than our inactions.

Lastly, the sunk-cost fallacy is the tendency to justify the status quo on account of past investments, even when it has become apparent that the investments were misguided and the approach should be revised. Under this framework, our resistance to change stems from our unwillingness to admit we were wrong. The temptation is that as long as we don’t change course, we don’t have to acknowledge that we made a mistake.

Even after we manage to deviate from the status quo, we are still reluctant to change too quickly. This hesitancy is likely a manifestation of conservatism bias, which is the tendency to insufficiently revise our beliefs when presented with new evidence. Although it’s impossible to ascertain the full extent of its influence, conservatism bias offers a compelling explanation for why the restrictions were eased so slowly even after the curve had been flattened. “The lockdowns are already in place,” we told ourselves. “Why not just a little longer, just to be safe?”

The common element in all of these concepts is fear. Fear of loss, fear of regret, and hence, fear of change. And it makes sense, because our natural reaction to fear is paralysis. It feels safer to stay the course than to begin moving in a different direction.

But the politicians aren’t just worried about loss and regret. They’re also worried about optics. And though they wouldn’t like to admit it, their concern for their reputation has probably played a considerable role in their decisions.

Just imagine how it would look if the lockdowns were lifted any faster. First, it would be an implicit admission that the initial lockdowns had been misguided and probably weren’t necessary in the first place. Second, they would run the risk of getting blamed for a rise in infections. But as long as they kept the strict lockdowns in place then they could blame any outbreaks on us because they were “doing everything they could”.

In short, it was much better optics for them to extend the lockdowns “for your safety” than to admit that they were wrong and that they overreacted. And if a few million people had to lose their jobs so the politicians could save face, so be it.

After the Lockdowns

Now that the lockdowns are being lifted and life is slowly returning to normal, another slew of biases is taking hold. The most obvious example here is hindsight bias, which is the tendency to perceive historical events as being more predictable than they actually were. In the same way that many people displayed overconfidence before the lockdowns, many people are now patting themselves on the back, confident that they “knew it all along”.

This ties in closely with confirmation bias, which is our proclivity to search for, interpret, favor, and recall evidence in a way that confirms our pre-existing beliefs. As Sherlock Holmes puts it, we “twist facts to suit theories instead of theories to suit facts.” A great example of this has been our propensity to interpret declining infection rates as a confirmation that the lockdowns “worked”, when in fact this is a textbook example of the post hoc fallacy.

The apparent success of the lockdowns has also led many people to conclude that the initial decisions were necessary and justified. But this conclusion is merely an example of outcome bias, whereby we judge the quality of the decision based on the quality of the outcome. In reality, the presence of a positive outcome doesn’t necessarily prove that the initial decisions were justified. And besides, if we consider the unintended consequences, there’s a decent chance that the lockdowns did more harm than good anyway.

The Most Dangerous Bias

Though all of the biases mentioned so far are important, there’s one that concerns me the most, and it’s called authority bias. Authority bias is the tendency to attribute greater accuracy to the opinion of an authority figure and be more influenced by that opinion. It was most notably established by the infamous Milgram experiment in 1961, which demonstrated people’s surprising propensity to trust and obey authority figures even to the point of violating their own conscience.

The pervasive influence of authority bias throughout the pandemic has been particularly disconcerting. From the very beginning, people have blindly trusted “the experts” even as they shut down our businesses, undermined our response efforts, and trampled our civil liberties.

And quite frankly, that scares me.

Whatever happened to having a healthy distrust of authority? When did we lose our skepticism and suspicion? Have we forgotten that they too are mere mortals? Have we forgotten how to think for ourselves and how to take responsibility for our own lives?

Perhaps. Or perhaps we have simply forgotten to be mindful of our biases. Perhaps we were unwittingly drawn to the easy answers, the herd mentality, the status quo, and the confirming evidence. If that’s the case, then I think there is still hope. But if we’re going to overcome our biases, we need to begin by learning to identify them.

And then we need to lead by example. We need to be honest about our own susceptibility to error. We need to model a healthy suspicion of our own predispositions. We need to take responsibility for our own blindness and be open to correction. And perhaps, in this way, we can show the world what true rationality looks like.

Meme Nation lists the currently known COVID-19 symptoms:

There is another symptom, reported by Franklin Templeton:

The first round of our Franklin Templeton–Gallup Economics of Recovery Study has already yielded three powerful and surprising insights:

1. Americans still misperceive the risks of death from COVID-19 for different age cohorts—to a shocking extent;
2. The misperception is greater for those who identify as Democrats, and for those who rely more on social media for information; partisanship and misinformation, to misquote Thomas Dolby, are blinding us from science; and
3. We find a sizable “safety premium” that could become a significant driver of inflation as the recovery gets underway.

What? The party that supposedly follows the science …

… gets the science wrong?

Six months into this pandemic, Americans still dramatically misunderstand the risk of dying from COVID-19:

1. On average, Americans believe that people aged 55 and older account for just over half of total COVID-19 deaths; the actual figure is 92%.
2. Americans believe that people aged 44 and younger account for about 30% of total deaths; the actual figure is 2.7%.
3. Americans overestimate the risk of death from COVID-19 for people aged 24 and younger by a factor of 50; and they think the risk for people aged 65 and older is half of what it actually is (40% vs 80%).

These results are nothing short of stunning. Mortality data have shown from the very beginning that the COVID-19 virus age-discriminates, with deaths overwhelmingly concentrated in people who are older and suffer comorbidities. This is perhaps the only uncontroversial piece of evidence we have about this virus. Nearly all US fatalities have been among people older than 55; and yet a large number of Americans are still convinced that the risk to those younger than 55 is almost the same as to those who are older.

This misperception translates directly into a degree of fear for one’s health that for most people vastly exceeds the actual risk: we find that the share of people who are very worried or somewhat worried of suffering serious health consequences should they contract COVID-19 is almost identical across all age brackets between 25 and 64 years old, and it’s not far below the share for people 65 and older.

The discrepancy with the actual mortality data is staggering: for people aged 18–24, the share of those worried about serious health consequences is 400 times higher than the share of total COVID deaths; for those age 25–34 it is 90 times higher. The chart below truly is worth a thousand words:

Our question asks about fear of serious health consequences, not fear of death, but the evidence to-date indicates that the two follow a very similar age distribution; indeed the CDC has clearly stated on its website that “Among adults, the risk of severe illness from COVID-19 increases with age, with older adults at the highest risk.” Recent concerns of possible adverse long-term consequences are by necessity speculative, since we obviously do not have long-term data yet.

On to the next point:

For the last six months, we have all read and talked about nothing but COVID-19; how can there be still such a widespread, fundamental misunderstanding of the basic facts? Our poll results identify two major culprits: the quality of information and the extreme politicization of the COVID-19 debate:

• People who get their information predominantly from social media have the most erroneous and distorted perception of risk.
• Those who identify as Democrats tend to mistakenly overstate the risk of death from COVID-19 for younger people much more than Republicans.

This, sadly, comes as no surprise. Fear and anger are the most reliable drivers of engagement; scary tales of young victims of the pandemic, intimating that we are all at risk of dying, quickly go viral; so do stories that blame everything on your political adversaries. Both social and traditional media have been churning out both types of narratives in order to generate more clicks and increase their audience.

The fact that the United States is in an election year has exacerbated the problem. Stories that emphasize the dangers of the pandemic to all age cohorts and tie the risk to the Administration’s handling of the crisis likely tend to resonate much more with Democrats than Republicans. This might be a contributing factor to why, in our survey results, Democrats tend to overestimate the risk of dying from COVID-19 for different age cohorts to a greater extent than Republicans do.

Our susceptibility to how the information is presented also plays a role. The same data can be portrayed in different forms on a graph—some reassuring and some alarming. Our study finds that how the data are presented has a very strong impact on people’s attitudes. For example, respondents who were shown COVID-19 case trends for Texas and Florida in isolation were much less willing to reopen schools and businesses than those who were shown the same trends compared to New York. And more alarming graphics tend to be used more frequently, as they generate greater engagement.

This misinformation has a very concrete adverse impact. Our study results show that those who overstate deaths among young people are more cautious about making purchases, more reluctant to travel, and favor keeping businesses and schools shut.

Here again, we find a significant difference across partisan lines. According to our study, political affiliation is as powerful as age in predicting whether someone would be likely to eat at a restaurant indoors; Democrats have roughly the same willingness to eat in a restaurant at 25% capacity as Republicans do in a restaurant at full capacity. Individual risk from COVID-19 depends on age and health, but perceived risk depends on one’s politics— and it’s perceived risk that drives behavior. Conversely, previous Gallup research has found that Republicans have been less likely to accept public health guidelines like wearing a mask, regardless of the local rate of infection—again evidence that partisanship plays an important role.

This misinformation also causes another fundamental problem. The policy decision of what activities to keep shut and for how long is a very difficult and consequential one. It requires balancing two opposite effects of uncertain scale: on the one hand the benefits in terms of slowing COVID-19 contagion, on the other hand the harm to the economy and to people’s long-term health and livelihoods. This decision is strongly influenced by public perceptions of dangers, not only because politicians are sensitive to the public’s concerns but also because politicians are people too, subject to some of the same biases. Our poll results suggest fundamental misperceptions of the risk of death or serious adverse health consequences from COVID-19 could be distorting these decisions.