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 probabilities such as the infection 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 ambiguity induced by scientific uncertainty increased the level of social distancing among ambiguity-loving people, but such evidence was nonexistent for ambiguity-averse counterparts.