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Rather doomed than uncertain: risk attitudes and transmissive behavior under asymptomatic infection

Author

Listed:
  • Konstantin Matthies

    (Amazon Japan G.K.)

  • Flavio Toxvaerd

    (University of Cambridge
    CEPR)

Abstract

We analyze the relation between individuals’ risk aversion and their willingness to expose themselves to infection when faced with an asymptomatic infectious disease. We show that in a high prevalence environment, increasing individuals’ risk aversion increases their propensity to engage in transmissive behavior. The reason for this result is that as risk aversion increases, exposure which leads to infection with certainty becomes relatively more attractive than the uncertain payoffs from protected behavior. We provide evidence from a laboratory experiment which is consistent with our theoretical findings.

Suggested Citation

  • Konstantin Matthies & Flavio Toxvaerd, 2023. "Rather doomed than uncertain: risk attitudes and transmissive behavior under asymptomatic infection," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 76(1), pages 1-44, July.
    • Handle: RePEc:spr:joecth:v:76:y:2023:i:1:d:10.1007_s00199-022-01448-y
    DOI: 10.1007/s00199-022-01448-y
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    More about this item

    Keywords

    Economic epidemiology; Risk aversion; Asymptomatic infection; Rational fatalism; COVID-19;
    All these keywords.

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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