Ambiguity and Self-Protection: Evidence from Social Distancing under the COVID-19 Pandemic

Abstract

This paper studies how people make decisions over preventive behaviors under ambiguity (i.e., Knightian uncertainty) where they do not even know the probability of a loss. In the context of the current COVID-19 pandemic, scientific uncertainty makes it hard to evaluate not only whether one will be infected, but also other statistics such as the mortality rate. We constructed a simple model and demonstrated how its effect was heterogeneous depending on ambiguity-attitudes. Motivated by the model, we further conducted a survey experiment in Japan where we manipulated the information regarding scientific uncertainty on COVID-19. We found that higher uncertainty increased the level of social distancing among ambiguity-loving people, but such evidence was nonexistent for ambiguity-averse counterparts.

Keywords: Scientific uncertainty, Ambiguity, Self-protection, Preventive behaviors, COVID-19

JEL Classification: D80, D81, I12