Tyler Cowen: belief

Transcript context

…Some more questions from Twitter. Then we’ll wrap it up. Paul Tilley on Twitter asked, “What industries or groups surprised you in their response to COVID, good or bad?” That the NBA just shut down all games as early as it did in March was brilliant and prescient, and that they would have the guts to pull the button on that rather than dragging it out. I give them a big A+ for it. That surprised me. I’ve always liked the NBA, but for that, they deserve a prize. On the downside, I don’t think you should blame small businesses or businesses for wanting to reopen, even if it’s bad for society. Maybe you should blame the people who go. But just the ease at which people have considered going to these very large-scale events, like college football games, in a way that, to me, just doesn’t make any sense. I believe in intertemporal substitution: if you can, don’t do it for a year, but next year, go to twice as many games. And how hard people find that to do is really striking. We actually need to incorporate it into our economic models. I can travel less this year, and next year, vaccinated, I might take more trips if the world will let me. Do more face-to-face CWTs and so on. Hang out with Lydia Davis, whatever. But people don’t think that way. It’s more a utility function of habit formation than intertemporal substitution than I would have thought, and I already knew the behavioral evidence on that. So it’s not that I’m completely in the dark that people aren’t entirely rational, but even then I’ve revised my priors. Another question, from Nikkhil Mulani: “Any big changes to your production function in 2020 that you think will stick around for the future?”…

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