Coordination and Social Distancing: Inertia in the Aggregate Response to COVID-19

Social distancing --- which is critical for mitigating the spread of COVID-19 --- has been slow and inadequate. Applying the literature on beauty contest models, we show: (1) When a new and rare virus, like COVID-19, emerges, the aggregate level of social distancing has inherent inertia. Novel infectious diseases abruptly change the appropriate level of social distancing, leaving individuals uncertain about how to act. Inertia arises because individuals care about conforming to social norms (e.g., it is awkward to refuse a social invitation or work request) and the common knowledge about the past norm of social distancing help individuals coordinate behavior. (2) Clear national public statements are essential in reducing that inertia and adjusting the public's behavior to the new, optimal level of social distancing. Such national statements enable individuals and communities to coordinate on new norms of behavior, reducing inertia and moving the society closer to the optimum. They generate a beneficial over-reaction from the public that helps offset the over-weighting of past experience. (3) National communication is better than local communication when optimal social distancing levels are highly correlated over-time and when individuals are poorly-informed, so that the overweighting of prior social distancing norms is more severe.