Question

In your opinion, how relevant are social preferences in the current coronavirus pandemic? Provide an example of your own choice..

Please provide as much evidence as possible

Answer 1

Social Preferences are very much relevant in the context of the recent pandemic. The nature of the coronavirus pandemic is such that people get infected from others who have the virus. The disease can spread from person to person through small droplets from the nose or mouth when the corona positive patient coughs or exhales.

So your probability of getting the disease increases if more and more people around you test positive for coronavirus. In words of economics, your utility depends on the utility of people around you. If they gain utility from testing negative of the disease, your utility also increases in the sense that the probability of getting the disease decreases for you. This is nothing but an example of social preference where the utility of one person depends not only on his own utility but also on the utility of other people.