You are currently browsing the monthly archive for July 2020.
The efficacy of lockdowns was debated at the start of the pandemic and continues to this day. Sweden, famously, chose not to implement a lockdown. As Anders Tegnell, remarked:
`Closedown, lockdown, closing borders — nothing has a historical scientific basis, in my view.’
Lyman Stone of the American Enterprise Institute expresses it more forcefully:
The quotes above reveal an imprecision at the heart of the debate. What exactly is a lockdown? Tegnell uses a variety of words that suggest a variety of policies that can be lumped together. Stone is careful to say there is no evidence in support of strict lockdowns. Suggesting that `less’ strict lockdowns might be beneficial. So, lets speculate about the other extreme: no lockdown relaxed or otherwise.
The presence of infected individuals increases the cost of certain interactions. If infected individuals don’t internalize this cost, then, in the absence of any intervention we will observe a reduction in the efficient level of economic activity.
How will this manifest itself? Agents may adopt relatively low cost precautionary actions like wearing masks. On the consumer side they will substitute away from transactions that expose them to the risk of infection. For example, take out rather than sit down and delivery versus shopping in person. In short, we will see a drop in the demand for certain kinds of transactions. Absent subsidies for hospital care, we should expect an increase in price (or wait times) for medical care further incentivizing precautionary actions on the part of individuals.
The various models of network formation in the face of contagion we have (eg Erol and Vohra (2020)) all suggest we will see changes in how individuals socialize. They will reduce the variety of their interactions and concentrate them in cliques of `trusted’ agents.
On the supply side, firms will have to make costly investments to reduce the risk of infection to customers and possibly workers. The ability of firms to pass these costs onto their customers or their suppliers will depend on the relative bargaining power of each. Restaurant workers, for example, may demand increased compensation for the risks they bear, but this will occur at the same time as a drop in demand for their services.
To summarize, a `no lockdown’ policy will, over time, resemble a lockdown policy. Thus, the question is whether there is a coordinated lockdown policy that is superior to an uncoordinated one that emerges endogenously.
One of the delights of pursuing a relatively young discipline is that one meets its pioneers. As one grows old in the discipline, so do the pioneers, who eventually pass into `the undiscovered country from whose bourn no traveler returns.’ Overlooked, at least by me, was that one also meets, in the chrysalis stage, those who will eventually lead the discipline into the next century. It was the untimely passing of William Sandholm on July 6th of this year, that brought this to mind.
I first met Bill in 1998. I had just moved to MEDS and he was on his way out as a new minted PhD. He, a shiny new penny and myself on the way to becoming so much loose change.
Within a decade, Bill rose to prominence as an authority on Evolutionary Game Theory. His book, “Population Games and Evolutionary Dynamics” became the standard reference for population games. The concept of evolutionary implementation can be credited to him.
Bill was also a provider of public goods. He wrote and made freely available software for working with evolutionary dynamics, served on panels and editorial boards.
As I recall Bill, I am reminded of a line from Mary Chase’s play, Harvey uttered by the main character Elwood Dowd:
Years ago my mother used to say to me, she’d say, ‘In this world, Elwood, you must be’ – she always called me Elwood – ‘In this world, Elwood, you must be oh so smart or oh so pleasant.’ Well, for years I was smart. I recommend pleasant. You may quote me.
Bill was both.
The Leisure of the Theory Class 
Recent Comments