Working Paper: NBER ID: w28578
Authors: Zhihan Cui; Geoffrey Heal; Howard Kunreuther; Lu Liu
Abstract: Social distancing via shelter-in-place strategies, and wearing masks, have emerged as the most effective non-pharmaceutical ways of combatting COVID-19. In the United States, choices about these policies are made by individual states. We develop a game-theoretic model and then test it econometrically, showing that the policy choices made by one state are strongly influenced by the choices made by others. If enough states engage in social distancing or mask wearing, they will tip others that have not yet done so to follow suit and thus shift the Nash equilibrium. If interactions are strongest amongst states of similar political orientations there can be equilibria where states with different political leanings adopt different strategies. In this case a group of states of one political orientation may by changing their choices tip others of the same orientation, but not those whose orientations differ. We test these ideas empirically using probit and logit regressions and find strong confirmation that inter-state social reinforcement is important and that equilibria can be tipped. Policy choices are influenced mainly by the choices of other states, especially those of similar political orientation, and to a much lesser degree by the number of new COVID-19 cases. The choice of mask-wearing policy shows more sensitivity to the actions of other states than the choice of SIP policies, and republican states are much less likely to introduce mask-wearing policies. The choices of both types of policies are influenced more by political than public health considerations.
Keywords: COVID-19; social distancing; shelter-in-place; masks; nonpharmaceutical interventions; NPIs; supermodular; strategic complementarity; tipping set; cascades; probit; logit
JEL Codes: H7; I1
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| decisions of other states (D70) | mask-wearing policy adoption by a state (H70) |
| number of states adopting social distancing or mask-wearing (H79) | tipping effect on undecided states (D79) |
| Republican states (H73) | introduction of mask-wearing policies (J18) |
| political considerations (D72) | choices of SIP and mask-wearing policies (R48) |