The Behavioural Economics of Decision-Making in a Crisis:,Lessons from the Covid Era

The Covid era provided an exceptional opportunity to record and examine decision-making in a crisis. We analyse the features of decision-making during the Covid era through the lens of behavioural economics. Covid-era decision-making processes and outcomes deviated acutely from what was recommended by Western public health authorities prior to mid-March 2020. We find that several behavioural economics concepts – including several concepts that we each individually identified as important early in the Covid era (e.g., in Foster 2020 and Pingle 2022) – explain why decision-making processes and the decisions made deviated from what had been considered best practice, often producing results that increased harm rather than ameliorating it. We reflect on how we might reduce the chance of repeating the types of mistakes made during the Covid era when a future similar crisis arises. Because human social planners are not immune to behavioural tendencies as economic analysis traditionally assumes, we find that we must plan to address our human frailties if we are to plan and act effectively the next time a crisis looms.