skip to content

Faculty of Economics

Journal Cover

Matthies, K. and Toxvaerd, F.M.O.

Rather Doomed than Uncertain: Risk Attitudes and Transmissive Behavior Under Asymptomatic Infection

Economic Theory, accepted

(2022)

Abstract: We analyze the relation between individuals’ risk aversion and their willingness to expose themselves to infection when faced with an asymptomatic infectious disease. We show that in a high prevalence environment, increasing individuals’ risk aversion increases their propensity to engage in transmissive behavior. The reason for this result is that as risk aversion increases, exposure which leads to infection with certainty becomes relatively more attractive than the uncertain payoffs from protected behavior. We provide evidence from a laboratory experiment which is consistent with our theoretical findings.

Keywords: Asymptomatic infection, COVID-19, Economic epidemiology, Rational fatalism, Risk aversion

JEL Codes: I12, D81

Author links: Flavio Toxvaerd  

Publisher's Link: https://doi.org/10.1007/s00199-022-01448-y



Papers and Publications



Recent Publications


Elliott, M., Golub, B. and Leduc, M. V. Supply Network Formation and Fragility American Economic Review [2022]

Huffman, D., Raymond, C. and Shvets, J. Persistent Overconfidence and Biased Memory: Evidence from Managers American Economic Review [2022]

Ding, Y. A Simple Joint Model for Returns, Volatility and Volatility of Volatility Journal of Econometrics [2023]

Freund, L. B., Lee, H. and Rendahl, P. The Risk-Premium Channel of Uncertainty: Implications for Unemployment and Inflation Review of Economic Dynamics, forthcoming [2023]