I think a large factor for people making decisions around covid risk is not just the risk they are posing to themselves, but also the risk they are imposing on others. Insofar as “risk I impose on others” enters my utility function, this is going to change a lot of your conclusions pretty quickly. The reason being that “risk imposed on others” is growing super-linearly in most activities.
E.g. If I go to a restaurant and then meet a friend, I’ve incurred much more risk to the friend than if I didn’t go to the restaurant. If I then meet a third friend separately, the risk to that friend is increased by each of the prior interactions, and so forth. Each additional activity poses additional risk to all the people involved in later activities. This is classic exponential growth type stuff, but all we need is super-linear growth in risk.
Once you have something (bad) growing super-linearly like that, it should be pretty straightforward to see that even if the net utility from each of two different actions is positive, the utility from doing both actions may be less than the utility of doing just one. Insofar as the thing that is growing super-linearly is about ‘micro-covids’, it makes sense that some things are better and worse on that scale (eating inside a restaurant vs going on a walk with a friend), and so accounting for that differential cost makes sense. And now we’re firmly in ‘budget’ territory—different costs for different activities all of which i like, but with some kind of max on how much I can reasonably spend.
I think a large factor for people making decisions around covid risk is not just the risk they are posing to themselves, but also the risk they are imposing on others. Insofar as “risk I impose on others” enters my utility function, this is going to change a lot of your conclusions pretty quickly. The reason being that “risk imposed on others” is growing super-linearly in most activities.
E.g. If I go to a restaurant and then meet a friend, I’ve incurred much more risk to the friend than if I didn’t go to the restaurant. If I then meet a third friend separately, the risk to that friend is increased by each of the prior interactions, and so forth. Each additional activity poses additional risk to all the people involved in later activities. This is classic exponential growth type stuff, but all we need is super-linear growth in risk.
Once you have something (bad) growing super-linearly like that, it should be pretty straightforward to see that even if the net utility from each of two different actions is positive, the utility from doing both actions may be less than the utility of doing just one. Insofar as the thing that is growing super-linearly is about ‘micro-covids’, it makes sense that some things are better and worse on that scale (eating inside a restaurant vs going on a walk with a friend), and so accounting for that differential cost makes sense. And now we’re firmly in ‘budget’ territory—different costs for different activities all of which i like, but with some kind of max on how much I can reasonably spend.