COVID-19 and Behavioral Economics: Certain Aspects of the Causes of Irrational Behaviour During a Pandemic

The aim of this article is to reveal the main reasons for the irrational behaviour of economic agents during the COVID-19 coronavirus pandemic in terms of behavioural economics and opportunities for change such a behaviour.The article reveals the approaches that were used in 2020 and continue to be used today as the main ones to prevent the spread of coronavirus infection. Despite the existence of such prescriptions, the infection continues to spread and causes negative socio-economic consequences.Thus, the main reasons, the resistance of citizens to the measures recommended by governments around the world and the manifestation of deviant behaviour among the seemingly “rational” economic agents were analyzed.The main reasons and possible factors for changing such a behaviour are the postulates of behavioural economics, such as the effect of reinforcement effect, conservative bias, confirmation bias, conditional cooperation, the preference of beliefs consonance.In addition, this paper provides a brief overview of some post-material values of Ukrainian society based on global research and offers an assessment of the dependence of these values on the incidence of COVID-19 and an explanation in terms of behavioural economics.The article notes that the presence of certain established views on the “normality” of preventive antivirus measures may affect the propensity or the lack of propensity to adhere to the necessary protective behaviour by economic agents.The research methods are descriptive, analytical, methods of synthesis and comparison. As a result of the analysis, the article proposes a comprehensive approach to men’s behaviour during the pandemic according to behavioural economics.The study concludes that the main task to improve the effectiveness of preventive measures for the spread of COVID-19 today is to understand the causes of irrational behaviour in new circumstances in terms of behavioural economics and apply the theory of “pushing” or “nudging” to form positive social economic change. It is suggested to use this paper for further and deeper practical research of certain aspects of changing people`s behaviour for better work effectiveness and wellbeing. JEL classіfіcatіon: D03, A13

Human value learning and representation reflects rational adaptation to task demands

When making decisions about goods and actions, humans and animals often rely on internally represented values. However, to be useful across a wide range of contexts, these values need to be represented on an absolute scale – a coding scheme that is computationally costly. By contrast, representing values in a way that depends entirely on context is highly computationally efficient, but can lead to irrational behaviour when values need to be compared across contexts. Thus, an efficient learner would allocate limited computational resources only when needed according to their expectations about the future. Here, we test the hypothesis that value representation is not fixed, but rationally adapted to expectations in two human learning experiments. Unlike most lab-based tasks, participants could use their initial experience (Phase 1) to optimise behaviour (Phase 2). Phase 1 was designed to cause one group to expect only decisions within local contexts (relative code sufficient), and another group to expect choices across local contexts (relative code insufficient). Despite identical learning experiences, the group whose expectations included choices across local contexts, went on to learn absolute value representations, and learned more absolute-like representations than the other group. Human value representation is neither relative nor absolute, but efficiently and rationally tuned to task demands.

Irrational Behaviour and Stock Investment Decision. Does Gender Matter?

The research aims to examine the influence of irrational behaviour on stock investment decision, specifically, anchoring, disposition effect, home bias, herding, overconfidence and the risk perception. The research further investigates the moderating role of gender between irrational behaviour and stock investment decision. Finally, it reveals which irrational behaviour is most prevalent. A survey collected the primary data from 425 individual investors. The survey evidence shows that, of six irrational behaviours, anchoring, disposition effect, overconfidence and risk perception were influence the investment decision of individual investors, and risk perception comes out to be the significant irrational behaviour on stock investment decision. It further explores that gender has a significant moderation for anchoring, disposition effect, herding, overconfidence, risk perception, and stock investment decision. We recommend that if individuals are aware of the behavioural biases, it will help them for making the right stock investment decisions. The study also relevant for financial advisors, stockbrokers and policymakers as it facilitates them in gaining a better understanding of their clients’ irrational behaviour. The present study gives a unique insight into the individual investors’ profile of gender corresponding to each main irrational behaviour on investment decision under consideration of stock investment.

Vernacular Reactions to COVID-19 in Estonia: Crisis Folklore and Coping

The objective of the article is to give an overview of the vernacular reactions to the corona crisis in Estonia, based on COVID-19-related folklore collected from written, oral, and online sources from March to June 2020, i.e., during the emergency situation established due to the coronavirus. The methodological approach of the article was a context-dependent comparative content analysis studying the functioning of thematic texts in the wider trans- and multi-media communicative process. The similarities and modifications in the content, structure, format, and function of the subject matter as well as people’s attitudes, expressions, ways of information synthesis and narrative generation in the respective social context were placed under the microscope. By giving examples of thematic religious lore, memes, and proverbs, we point out how certain core motifs and core texts become actualised whenever a new epidemic occurs. We presume that the recycling of known and tested motifs in order to give meaning to the situation helps mitigate the unpredictability arising from the epidemic and determine the borders of danger and safety with the help of narrative, thereby increasing the sense of coping, although some folk motifs may also create or deepen fears and irrational behaviour.

Addendum: Irrational behavior in C. elegans arises from asymmetric modulatory effects within single sensory neurons

We would like to make our readers aware of the publication by Cohen et al., which reports irrational behaviour in C. elegans olfactory preference[1] . These complementary studies establish C. elegans as a model system to explore the neural mechanisms of decision making.

Nudging people out of poverty

New insights within the field of behavioural economics have led to the discovery of irrational behaviour of economic agents. The concept of ‘nudging’ is one approach to tackle this irrationality. Weillustrate that behavioural economics could be especially helpful for tackling poverty, as the lives of the poor make them very vulnerable to income shocks. Also, the poor constantly deplete their mentalresources. Moreover, we discuss ethical regulations for policies based on behavioural economics, centered around the idea of transparency. Finally, we present ideas scholars have put forward thatcould be used to tackle poverty by using behavioural economics and evaluate them from our own perspective.

Irrational Behavior of Households on Investment Decision – Emotional and Social Status Behavior

Every human has a unique mindset in performing regular activities. Often changing environmental situations and traditional follow-ups influence the humans by their emotional and social cultural factors. The authors of the research paper made an attempt to study irrational behaviour of household investors on investment decisions. The authors adopted purposive sampling method in the study of irrational behaviour of households with respect to emotional and social status bias. The primary data is collected with the help of a well structured close-ended questionnaire which consists of necessary parameters to measure the emotional and social status biases. The collected data were analysed with the help of the statistical tools packages like Statistical Package for Social Science (SPSS) and Analysis of Movement Structure software for validating the theoretical assumptions and derived at the valid results from the data. The study hence done found that emotional and social status biases influence the decision making processes and the path analysis confirmed that the emotional and social behavioural biases had significant impact on the investment decision of individual household investors.

Influence of Behavioural Factors Affecting Investment Decision—An AHP Analysis

Investors exhibit irrational behaviour in their decision-making. The decision-making process itself is considered to be a cognitive process as the investors have to make a decision based on various alternatives available to them. The researchers have found that the investors’ decision-making was adversely affected by the various psychological/behavioural factors. The current study was carried forward to identify the effect of the behavioural factors affecting the investment decision of the investors. Five behavioural factors, namely overconfidence bias, representative bias, regret aversion, mental accounting, and herd behaviour, were considered to study the behavioural biases of the investors. The study sample was taken from investors of Kerala, and the analytical hierarchy process (AHP) method was used to analyse the intensity of behavioural factors affecting the investment decision. Based on the priority vector, it was found that the investors of Kerala were highly influenced with overconfidence bias and regret aversion. Herd behaviour had less effect on their decision-making.

Goldmark’s wild Amazons drama and exoticism in the Penthesilea overture

Goldmark was the first of several composers to write a work based on Heinrich von Kleist’s controversial play, Penthesilea. Early critical opinion about the overture was divided. Hanslick found it distasteful, whereas others were thrilled by Goldmark’s powerful treatment of the subject. Composed in 1879, during the 1880s Penthesilea became established in orchestral repertoire throughout Europe and America. The overture represents the conflict of violence and sexual attraction between the Queen of the Amazons and Achilles. Exoticism in the play is achieved by contrasting brutal violence, irrational behaviour and extreme sensual passion. This is recreated musically by drawing on topics established in opera. Of particular note is the use of dissonance and unexpected modulations, together with extreme rhythmic and dynamic contrast. A key feature of the music is the interplay between military rhythms representing violence and conflict, and a legato, rocking theme which suggests desire and sensuality.