Behavioral Law and Economics Meets COVID-19

In our recent paper, ‘Infected by Bias: Behavioral Science and the Legal Response to COVID-19’, we apply the framework of behavioral economics to better understand efforts to address the COVID-19 pandemic through legislation, regulation, and executive orders. More specifically, the paper deals with two separate questions. First, it explores to what degree cognitive heuristics and biases impacted the policy debate regarding the legal response to the pandemic. Second, the paper examines how behaviorally informed modes of regulation (ie, nudges) should be used by lawmakers dealing with the pandemic. In this post we will briefly highlight some of our main findings, omitting caveats that can be found in the full paper. 

Our descriptive analysis highlights numerous heuristics and biases that might have played a role in COVID-19 policy debates. For example, legal responses to COVID-19 required risk assessments, which activate known and predictable biases that affect subjective probability estimates. To this end, phenomena such as the availability bias might cause people to overestimate the risk of the pandemic, giving momentum to more intensive control measures. On the other hand, we also highlight the impact of phenomena like the omission bias and procrastination, which could delay the adoption of necessary decisions. Additionally, the paper reviews recent findings on social cognition and COVID-19 from the United States, which demonstrate how partisan views and values affected the interpretation of risk information. 

Turning to the second question, we argue that mandates rather than nudges should provide the backbone of the legal response to a pandemic. Choice-preserving regulation, including techniques like default rules and changing the decision-making environment, has been effective for prompting choices that serve people’s best interests. That is, individuals seeking to lose weight, save for retirement, or choose financial products may embrace nudges, because nudges serve their interests. The response to an infectious disease, however, is a collective action problem—people might (rationally) decide that they are better off ignoring the nudge, creating negative externalities that, in this case, prove fatal. Thus, mandates are needed to achieve widespread and durable change. That said, nudges can still contribute to the COVID-19 response as substitutes for mandates that are legally impossible (eg, in topics involving constitutional rights) or as complements to promote voluntary compliance with existing mandates. To this end, we review examples of behaviorally informed interventions established to contain COVID-19, ranging from the messaging used by world leaders to the floor markings put in place in supermarket aisles.

Doron Teichman is the Jacob I Berman Chair in Law at the Faculty of Law, Hebrew University of Jerusalem.

Kristen Underhill is Associate Professor at Columbia Law School.