Here’s why some are too optimistic about the pandemic
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We are now seven months into the pandemic, and the numbers are once again getting worse. Average new cases per day have jumped in the past week to more than 50,000.
The fear is we might be letting our guard down because of what’s called optimism bias. Behavioral scientists and economists have found patterns suggesting we downplay the likelihood of bad news, whether it’s investments, business plans or getting COVID-19.
“Optimism bias is our tendency to overestimate the likelihood of experiencing positive events — such as financial success or having a long, happy marriage — and our tendency to underestimate the likelihood of experiencing negative events,” said Tali Sharot, a cognitive neuroscientist at University College London and author the “The Optimism Bias.”
With the pandemic, we get good news one day, bad news the next. Sharot has found that people underprocess the bad news and don’t build it into their expectations.
“We take in the positive a little more than the negative. And in fact, we’ve done brain imaging studies that show the brain encodes this unexpected positive information about the future better than unexpected negative information,” she said.
Optimism can be a good thing. It’s tied to longer lives and less depression. But it can also lead to reckless behavior, like borrowing too much money or being careless about COVID-19, according to a study Marie Helweg-Larsen is writing up. She teaches psychology at Dickinson College in Pennsylvania.
“When people don’t think they are personally at risk, they are less likely to wash their hands or engage in social distancing,” she said.
Helweg-Larsen said optimism bias is hard to overcome, but one way to fight it is to force yourself to develop good habits, like washing your hands over and over again, for 20 seconds, until you no longer think about why.
“We don’t brush our teeth as a result of some careful risk estimation of our cavity proneness. We don’t stop wearing our seat belts because we have not experienced seat belts saving our lives. We just do those things because they’re habits,” she said.
There is another type of overconfidence experts worry about. Management professor Don Moore at the University of California, Berkeley, Haas School of Business studies salience bias. That’s when people overemphasize things they see, like the healthy people they encounter at the park or at the supermarket, during the pandemic and downplay what they don’t see.
“The sick disappear,” he said. “They’re in isolation wards in hospitals. We don’t see them. Another important dimension is those individuals who are being the most cautious. They are also invisible to us. They’re at home.” In other words, it’s easy to assume this COVID thing is no big deal.
Moore cites a classic study of college students that shows how we can draw the wrong conclusions by seeing only what’s in front of us.
“Many have the mistaken impression that others like to party and drink more than they do,” Moore said. “Well, the shy people, they’re in their dorm rooms studying. And the ones who you see on Friday night, those are the ones who like to get out and party and drink.”
Behavioral economists call this problem “thinking fast,” which can lead to snap judgments that aren’t always rational, and sometimes making people overly optimistic.
COVID-19 Economy FAQs
How many people are flying? Has traveled picked up?
Flying is starting to recover to levels the airline industry hasn’t seen in months. The Transportation Security Administration announced on Oct. 19 that it’s screened more than 1 million passengers on a single day — its highest number since March 17. The TSA also screened more than 6 million passengers last week, its highest weekly volume since the start of the COVID-19 pandemic. While travel is improving, the TSA announcement comes amid warnings that the U.S. is in the third wave of the coronavirus. There are now more than 8 million cases in the country, with more than 219,000 deaths.
How are Americans feeling about their finances?
Nearly half of all Americans would have trouble paying for an unexpected $250 bill and a third of Americans have less income than before the pandemic, according to the latest results of our Marketplace-Edison Poll. Also, 6 in 10 Americans think that race has at least some impact on an individual’s long-term financial situation, but Black respondents are much more likely to think that race has a big impact on a person’s long-term financial situation than white or Hispanic/Latinx respondents.
Find the rest of the poll results here, which cover how Americans have been faring financially about six months into the pandemic, race and equity within the workplace and some of the key issues Trump and Biden supporters are concerned about.
What’s going to happen to retailers, especially with the holiday shopping season approaching?
A report out recently from the accounting consultancy BDO USA said 29 big retailers filed for bankruptcy protection through August. And if bankruptcies continue at that pace, the number could rival the bankruptcies of 2010, after the Great Recession. For retailers, the last three months of this year will be even more critical than usual for their survival as they look for some hope around the holidays.
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