Path-dependent Preferences and Polarized Public Response to Pandemic

People with liberal traditions exhibit polar opposite views and behavior toward COVID-19. We analyze this phenomenon by employing a dynamic game model involving stochastic transmission-intensity rates, asymptomatic infections, and heterogeneous agents making communicable-activity decisions in each period under disease uncertainty. Active agents freely choose communicable activities that increase their utility flows along with infection probabilities. Our analysis reveals the following: (1) The polarized public response to the pandemic arises when the disease-probability function is more concave than the agents' utility function for communicable activities, which suggests that polarization can be rooted in individual rationality. (2) Asymptomatic infection implies a path-dependent disease probability that declines with agents' past activities, which makes sense of a gradually relaxing lockdown policy even when the transmission intensity remains the same. (3) Monotone comparative statics results suggest that agents with lower discount factors, lower probability of being sick upon infection, or lower expectation of suffering upon being sick tend to choose higher equilibrium activities. (4) If the virus persists, then the only long-run equilibrium outcome without government intervention is herd immunity.