Thomas Z. Ramsøy

The human biases behind the COVID-19 crisis

We are through the first quarter of 2020, and the world feels so very different. As we are adjusting to our new situation with no less than two crises – a pandemic and a recession – many of us are starting to ponder about how we got where we are now. After all, who could have guessed this would happen so fast? Who would have thought that we would have two, not one, crises? What’s going on?

The truth is: we should not be surprised! We’re following every step of the behavioral expert handbook.

It’s a people problem

It’s not like we were not warned. Take Bill Gates’ TED talk five years ago. Already then, he stated that we are not ready for the next outbreak. From then until now, we’ve had five years to prepare. Don’t get me wrong: we have prepared! Medical researchers have worked hard every single day to understand potential biohazards. But they have had to fight an even harder battle: to get the needed political attention and funding for their work.

The current crisis is not only a virus problem, or a financial problem. It’s a human psychology problem. Despite our deepening understanding of the human mind, we still fail to act accordingly. The current coronavirus crisis has very clearly shown us our own mental limits. A virus is not something we can really see, hear or feel with our hands. Sure, we can get sick or see others become ill, but it is still “mysterious” to our concrete human psyche.

The current crisis (…) is a human psychology problem

This is why we tend to see that situations like a pandemic can drive two strong responses in humans: one that leads to extremely anxiousness, and another that neglects that there is a problem in the first place. As so often, the truth is somewhere in the middle.

The fallible human mind

The very same issues can be seen with other problems, such as the climate crisis. The problem with “the climate” is too abstract, too remote, too unfamiliar for people to understand. Most of the time it has been something we say but rarely act on.

Only recently we have seen more clear signs of the effects of the warming climate. Melting glaciers, global heat records, more devastating hurricanes. The list gets longer with time. This makes people understand it better. It becomes tangible and felt. To some extent we start acting accordingly. Indeed, recent studies have also shown that survivors of climate-related catastrophes (e.g., a hurricane) are also more likely to be acting more environmentally friendly afterwards.

If anything, the current pandemic crisis clearly shows how fallible the human mind is. When the COVID19 started in Wuhan, it was clear that something was different than a mere virus outbreak. While information initially was scarce, more dedicated information was soon shared. Still, governments around the globe did not act in due time. The virus was still considered “out there” and something that could be tracked.

Human biases are the key

Indeed, the COVID-19 pandemic shows our own behavioral biases at full display. One can even reasonably claim that the crisis is mainly driven by our human fallible mind. For many years, behavioral scientists have shown that human behaviors are biased in a lot of different ways. We deviate from rational, utility-maximizing choices. To put it bluntly, we are not fully wired to act smart.

In the vocabulary of the behavioral scientist, we can list many biases that contribute to the current crisis. Let’s look at them in turn.

During the early stages of a crisis like the COVID-19 pandemic, we tend to show certain types of responses. Here, we can display a neglect of probability. That is, we underestimate that something will happen. We don’t believe that the virus will spread to our country, and when it does, we believe that it wont spread much. Another factor playing in here is the anchoring effect bias where we base too much of our decisions on the first information we get, and be slow to adjust when new information comes in.

We also show an exponential growth bias in that we have a tendency to not understand how many things develop non-linearly. In a similar manner, we suffer from hyperbolic discounting: we tend to put more weight on the present than the future. This made very good sense for our ancient human minds who lived hand to mouth. Our evolutionary past has given us an expectation that tomorrow will very much be like today, which was like yesterday. We live linear lives. The exponential growth bias has long been touted by people in innovation: that we fail to understand just the pace that a doubling of computer power has on our lives.

When a regional or national strategy has been made, we still make mistakes: the sunk-cost fallacy can come into full play. This is the tendency to stay on the same course for too long despite evidence to the contrary. The more time and costs we have invested, the longer it will take for us to change course. In a situation where leadership requires agility, this is a bad bias to live by.

Biased consumers

Once the crisis is a realization, many people start acting. But this act is not always optimal, either. Our choices as individuals, consumers, and parents are also biased. For example, why are people “Hamsterkaufing” toilet paper? A part of this can be due to a zero-risk bias. This is the tendency to favor the complete elimination of risk rather than merely minimizing the risk. For example, people prefer reducing risk from 5% to 0% disproportionately more than the reduction from, say, 45% to 40%. It’s still a 5% risk reduction. Another bias is loss aversion, where we tend to value potential losses twice as much as potential gains.

As consumers, we also follow the bandwagon effect. We are socially conform and tend to “follow the crowd.” Besides the globally mindless hoarding of hand sanitizers and toilet paper, we also see regional differences, such as stockpiling of feta in Greece, panic buying of ham in Spain, hamstering of rice in Afghanistan, here in Denmark it’s rye bread and yeast, and stocking up on weed in the Netherlands.

In the coming days, weeks, and months, we will also see other types of behaviors at full display. First, the COVID-19 crisis is on everybody’s mind. This thinking of current event will lead to an availability bias, where we tend to rely more on things that we remember more easily and automatically. The more we hear about the coronavirus and the financial crisis, the more our decisions tend to be influenced by this mindset.

We will also see one of the more well known deviations, confirmation bias, where we tend to favor information that supports our belief more than things that go against our beliefs. Change is hard when you favor evidence that supports your belief and discard evidence that goes against it.

Finally, we can also expect to see much display of the bystander effect. We tend to believe that others will “fix it.” Many of us will expect that others solve the crisis: the politicians, medical staff, scientists. But while this is also true, we also see that each individual can make a contribution to both their own health but especially also to others.

The current pandemic and accompanying financial crisis is indeed due to a novel pathogen. But many of the problems we now have are of our own making. Just like many financial, environmental, and health crises, the COVID-19 is in large part a human behavior crisis. And that’s also where the solutions should be found.