Judgment and Decision Making (Jul 2022)

Preferences after pan(dem)ics: Time and risk in the shadow of COVID-19

  • Xavier Gassmann,
  • Antoine Malézieux,
  • Eli Spiegelman,
  • Jean-Christian Tisserand

DOI
https://doi.org/10.1017/S1930297500008925
Journal volume & issue
Vol. 17
pp. 745 – 767

Abstract

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This paper uses the COVID-19 health crisis to study how individual preferences respond to generalized traumatic events. We review previous literature on natural and man-made disasters. Using incentive-compatible tasks, we simultaneously estimate risk and ambiguity aversion, time discounting, present bias, and prudence parameters before, during, and after the COVID-19 lockdown in France. We find patience, risk aversion, and ambiguity aversion fell during lockdown, then gradually returned toward their initial levels 4 months later. These results have implications for health and economic policies, and deepen our understanding of the responses – and resilience – of economic preferences to traumatic events.

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