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Free beer, doughnuts and a $1 million lottery – how vaccine incentives and other behavioral tools are helping the US reach herd immunity

Governments and companies are using incentives in hopes of getting more Americans to get a COVID-19 shot. A behavioral economist explains how they work.

The maker of Bud Light says it will give all Americans over 21 a free beer if the U.S. reaches Biden's 70% vaccination goal. Andrew Burton/Getty Images

A growing number of states, cities and companies are offering incentives to encourage people to get vaccinated. And the sweeteners keep getting bigger and better.

New Jersey, for example, is picking up the tab for a free beer for those who can prove they got a shot. Maryland is offering state employees US$100, while Lancaster, California, is trying to encourage teens to get inoculated by entering their names in a raffle for college scholarships worth up to $10,000. Not to be outdone, Ohio said it is creating a lottery with prizes of up to a full four-year scholarship for newly vaccinated teens and $1 million for adults; several winners have already been announced.

Meanwhile, companies are offering everything from paid time off and gift cards to doughnuts and a burger and french fries. And on June 2, Anheuser-Busch InBev promised all Americans age 21 and up a free beer if the U.S. reaches President Joe Biden’s goal of giving 70% of adults one shot by July 4.

Of course the big question is, will any of this work? Early reports suggest at least some of the incentives are in fact helping, particularly among younger people.

The stakes couldn’t be higher. Health officials say herd immunity is critical to ending the pandemic, and that means having anywhere from 60% to 90% of a given population vaccinated, including children. But recent surveys suggest more than one-third of adults are at least reluctant to get the vaccine.

While behavioral economists generally study people’s decisions and the effect of incentives on behavior, my research at the Los Angeles Behavioral Economics Laboratory focuses more closely on why they make those decisions. I believe incentives can work, but there are two other important tools in policymakers’ behavioral toolkits as well.

How we make decisions

Decision-making is guided by whether people perceive an option as rewarding or displeasing.

We evaluate decisions based on how we encode and recollect our own personal experiences, how costly we feel it is to choose one path or another and how we process the information around us. In addition, the different communities we live in may reinforce certain messages over others – as evidenced by the uneven vaccination rates across the country.

The intention to get vaccinated may be influenced by factors including education level, religious beliefs or political affiliation.

Some of the reasons people give for not wanting to get vaccinated can probably be addressed, while others may be insurmountable. But to induce people to make decisions that they are reluctant to make, one needs to shift their motivations.

Giving people an incentive

Economic incentives are one way to do that.

Economic incentives can make a decision more pleasant by offering rewards or lowering costs. Recent examples of efforts to make getting vaccinated more rewarding include offering savings bonds, coupons, tickets for baseball games and free items in shops.

These incentives target people who think that they do not need a COVID-19 vaccine, who usually do not get vaccinated for nonideological reasons, or those who find it inconvenient.

Recent surveys suggest such tactics could be successful. One recent poll found that 47% of people who want to “wait and see” about the vaccines said getting paid time off from work to get a shot would make them more likely to do so. And 39% said a financial incentive of $200 would do the trick.

A problem with states offering cash payments or lottery winnings is that people may interpret them as a signal that the vaccine is dangerous, perhaps reinforcing their own beliefs. Research also suggests that perks may be more effective than cash and may be a good alternative for both states and companies.

News you can use

But incentives aren’t the only way governments can get people to change their minds.

Information campaigns are an attractive alternative. They aim to shift beliefs and opinions by providing knowledge and awareness about some elements of the decision a person may have missed. This includes disclosing the results of clinical trials or explaining how mRNA vaccines work on the 12-to-15-year-olds who are now eligible.

People who fear that clinical trials have been rushed and are still hesitant might respond favorably to information campaigns demonstrating the effects of the vaccines on the U.S. population and elsewhere. These campaigns could also be combined with incentives, such as inviting people to watch informational videos and then rewarding them with credits that they can use at local stores.

This type of motivational push is least likely to work with those who do not trust sources of information that contradict their opinions or whose opposition to the vaccine is ideological.

A New York police office bites into a Krispy Kreme doughnut while holding a box of doughnuts as other officers and Krispy Kreme employees mingle in background
Krispy Kreme is giving away doughnuts to people who got vaccinated. Loren Wohl/AP Images for Krispy Kreme Doughnuts

A little nudge

If incentives and offering information don’t work, another option is the nudge, a term popularized by behavioral economist Richard Thaler and legal scholar Cass Sunstein.

Nudges use positive reinforcement or indirect suggestions to influence behavior, such as by taking advantage of peer pressure or by making a certain choice easier for people to adopt. Research shows they can be very effective. For example, requiring people to opt out of a company 401(k) plan rather than opt in led to a substantial increase in the number of people saving for retirement.

Many people are already nudging friends and colleagues in their social networks to get vaccinated by posting pictures of themselves on Twitter and Facebook getting a shot, celebrating or holding their vaccination cards. Policymakers could similarly promote vaccination by demonstrating that others in the same community already got a shot.

Governments could also make it easier to get a shot by doing things like adding vaccine sites at subway stations.

Nudges are appealing because they do not cost as much as economic incentives. They also can help change habits, and they sometimes have persistent effects. However, nudges work best if people agree with the end outcome.

Persuading the persuadable

There is little chance incentives will persuade people who have set their minds against the vaccine or whose objections are based on conspiracy theories. Because it is in their interest to promote these views, or because they are convinced that they are right, they will resist economic incentives, disregard information campaigns and refuse to be nudged in a direction opposite to their beliefs.

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However, there seems to be hope to persuade many of the hesitant or reluctant. A recent survey of people in these categories revealed that about 20% of respondents would get vaccinated after people they know did.

The Centers for Disease Control and Prevention recently offered another type of motivation when it said that vaccinated people could go mask-free in most settings, including indoors. Another recent poll suggested this may be effective with Republicans, who were significantly more likely to be willing to get a shot if it meant they no longer had to wear a mask.

I believe a combination of incentives and other motivations stands a good chance of helping the U.S. reach herd immunity and ultimately end the pandemic.

This article was updated on June 4, 2021, to add details about Anheuser-Busch InBev’s beer giveaway and a report on the effectiveness of incentives.

Isabelle Brocas receives funding from the National Science Foundation. She is affiliated with the Center for Economic Policy Research (London).

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Spread & Containment

COVID-19 may never go away, but practical herd immunity is within reach

It is unlikely that we will reach full herd immunity for COVID-19. However, we are likely to reach a practical kind of herd immunity through vaccination.

The level of immunity needed — either through vaccination or infection — for practical herd immunity is uncertain, but may be quite high. (Shutterstock)

When people say that we won’t reach “herd immunity” to COVID-19, they are usually referring to an ideal of “full” population immunity: when so many people are immune that, most of the time, there is no community transmission.

With full herd immunity, most people will never be exposed to the virus. Even those who are not vaccinated are protected, because an introduction is so unlikely to reach them: it will sputter out, because so many others are immune — as is the case now with diseases like polio and mumps.

The fraction of the population that needs to be immune in order for the population to have “full” herd immunity depends on the transmissibility of the virus in the population, and on the control measures in place.

It is unlikely we’ll reach full herd immunity for COVID-19.

For one thing, it appears that immunity to COVID-19 acquired either by vaccination or infection wanes over time. In addition, SARS-CoV-2 will continue to evolve. Over time, variants that can infect people with immunity (even if this only results in mild disease) will have a selective advantage, just as until now selection has mainly favoured variants with higher transmission potential.

Electron micrograph of a yellow virus particle with green spikes, against a blue background.
The B.1.1.7 variant of the SARS-CoV-2 virus. Over time, variants of concern will likely continue to emerge. NIAID, CC BY

Also, our population is a composition of different communities, workplaces and environments. In some of these, transmission risk might be high enough and/or immunity low enough to allow larger outbreaks to occur, even if overall in the population we have high vaccination and low transmission.

Finally, SARS-CoV-2 can infect other animals. This means that other animal populations may act as a “reservoir,” allowing the virus to be reintroduced to the human population.

Practical herd immunity

Nonetheless, we are likely to reach a practical kind of herd immunity through vaccination. In practical herd immunity, we can reopen to near-normal levels of activity without needing widespread distancing or lockdowns. This would be a profound change from the situation we have been in for the past 18 months.

Practical herd immunity does not mean that we never see any COVID-19. It will likely be with us, just at low enough levels that we will not need to have widespread distancing measures in place to protect the health-care system.


Read more: COVID-19 variants FAQ: How did the U.K., South Africa and Brazil variants emerge? Are they more contagious? How does a virus mutate? Could there be a super-variant that evades vaccines?


What level of immunity (either through vaccination or infection) we need for practical herd immunity is uncertain, but it may be quite high. The original strain of SARS-CoV-2 was highly transmissible and transmission is thought to be higher still for some variants of concern.

Empty vials of Pfizer's COVID-19 vaccine
To achieve two-thirds immunity, 90 per cent of the eligible population would need to be vaccinated or infected naturally. (AP Photo/John Locher)

The amount of immunity we need will also depend on what level of controls we are willing to maintain indefinitely. Continued masking, contact tracing, symptomatic and asymptomatic testing and outbreak control measures will mean we will require less immunity than we would without these in place.

Some estimates suggest that we may need two thirds of the population to be protected either by successful vaccination or natural infection. If 90 per cent of the population is eligible for vaccination, and vaccines are 85 per cent effective against infection, we can obtain this two thirds with about 90 per cent of the eligible population being vaccinated or infected naturally.

The United Kingdom has already exceeded these rates in some age groups. Higher rates are even better, because there is still uncertainty about the level of transmissibility and vaccine efficacy against infection (although research shows they are very good against severe disease). We don’t want to discover that we do not have enough immunity through vaccination and have another serious wave of infection.

Emerging variants

A sticker reading 'I'm COVID-19 vaccinated' from Vancouver Coastal Health
Booster vaccinations will hopefully allow us to maintain long-term practical herd immunity against future variants of COVID-19. THE CANADIAN PRESS/Jonathan Hayward

Higher vaccine uptake will mean there are fewer infections before we reach practical herd immunity. The remaining unvaccinated individuals will be safer, protected indirectly by the immunity of those around them. Outbreaks will be smaller and rarer, and there will be fewer opportunities for vaccine escape variants to arise and spread.

That said, variants of SARS-CoV-2 will continue to emerge, and selection will favour variants that escape our immunity. Vaccine developers will continue to broaden the spectrum of the vaccines that are available, and boosters will hopefully allow us to maintain long-term practical herd immunity.

It’s possible that an immune escape variant will emerge that is severe enough, and transmissible enough, that it will cause a new pandemic for which we do not have even practical herd immunity. But barring that, while we may not be free of COVID-19, we can be confident that in the not-too-distant future it will be manageable when we return to near-normal life.

Caroline Colijn's research group receives funding from the Natural Sciences and Engineering Research Council of Canada, Genome British Columbia, the Michael Smith Foundation for Health Research, the Public Health Agency of Canada and Canada 150 Research Chair program of the Federal Government of Canada.

Paul Tupper's research group receives funding from the Natural Sciences and Engineering Research Council of Canada.

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Stocks

Citadel Settles Suit Alleging Former Senior Trader Shared Its Algorithmic “Secret Sauce”

Citadel Settles Suit Alleging Former Senior Trader Shared Its Algorithmic "Secret Sauce"

Citadel has reached a settlement with the British hedge fund it accused of trying to plunder one of its senior traders in an effort to get to its algorit

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Citadel Settles Suit Alleging Former Senior Trader Shared Its Algorithmic "Secret Sauce"

Citadel has reached a settlement with the British hedge fund it accused of trying to plunder one of its senior traders in an effort to get to its algorithmic "secret sauce".

GSA Capital Partners LLC and Citadel announced the settlement late last week after Citadel accused the fund of obtaining "closely guarded" trading strategies when it hired the employee in question, Vedat Cologlu, according to Bloomberg. 

GSA said of the settlement that the two firms “recognize and respect the importance and value of the other’s rights over their confidential information and intellectual property.”

We first documented that Citadel was suing British hedge fund GSA Capital in January of 2020, after GSA attempted to hire Cologlu, allegedly in hopes of accessing the quant secrets at the core of Citadel's "ABC" automated trading strategy. 

Recall, we wrote back in November of 2020 that Citadel was seeking around $40 million over claims that GSA was able to obtain information on the strategy via texts and WhatsApp.

Citadel argued late last year that GSA "can't unsee" and can't forget the information that was taken from Citadel's secret algorithm. Citadel is also moving to try and block GSA from using their trading model. GSA has argued that they found no "secret sauce" from a high-level description of the structure of a trading algorithm. 

David Craig, a lawyer for Citadel Securities, said in late 2020: “GSA’s most senior managers now know where and how Citadel makes hundreds of millions of dollars in annual revenues. They cannot forget that information, or put it out of their minds.”

He noted that only 15 of Citadel's 3,000 employees ever had access to the "strategic logic" of the strategy. One of those employees was Cologlu, a 2007 Wharton grad and self-described "stat arb trader", who helped operate and administer the models whose "returns were notably high given the low level of risk it took on."

Citadel has claimed its "ABC" quant strategy cost more than $100 million to develop. In its lawsuit, Citadel alleged that the UK fund wanted Cologlu to hand over confidential information about the strategy:

GSA asked for sensitive information on his equity-trading including his profits and the speed of the trades. And then Cologlu handed over a plan that Citadel argues was based on its own confidential model, including the way the algorithm made predictions.

And there's good reason for the information to be coveted. Citadel Securities has been wildly profitable: the company posted a record $6.7 billion in revenue in 2020. This was almost double the previous high in 2018. The blockbuster result came after some of its traders moved from Chicago and New York to set up shop in a Palm Beach hotel in late March 2020 as the pandemic upended lives and markets across the globe. The results of the privately-held company were released in presentation to investors as part of a $2.5 billion loan Citadel Securities was seeking.

The Citadel securities trading arm started as a high-frequency market-maker in options before pushing into equities. Today, the firm dominates that realm and has had a very close relationship with the likes of the millennials' favorite trading platform, Robinhood. We documented back in September 2020 that Citadel now controls 41% of all retail trading. 

GSA was spun out of Deutsche Bank AG in 2005 and manages around $7.5 billion. Citadel’s legal filing names GSA founder and majority owner Jonathan Hiscox as a defendant, alongside other officials including the chief technology officer.

Back in January 2020, we noted the full details of Citadel's lawsuit. 

Tyler Durden Sat, 06/12/2021 - 14:00

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Spread & Containment

UK Government Adviser Says Mask Mandates Should Continue “Forever”

UK Government Adviser Says Mask Mandates Should Continue "Forever"

Authored by Paul Joseph Watson via Summit News,

A UK government adviser and former Communist Party member Susan Michie says that mask mandates and social distancing should…

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UK Government Adviser Says Mask Mandates Should Continue "Forever"

Authored by Paul Joseph Watson via Summit News,

A UK government adviser and former Communist Party member Susan Michie says that mask mandates and social distancing should continue “forever” and that people should adopt such behaviour just as they did with wearing seatbelts.

Michie, who is a Professor of Health Psychology at UCL and a leading member of SAGE, said such control measures should become part of people’s “normal” routine behaviour.

"Vaccines are a really important part of pandemic control but it is only one part. [A] test, trace and isolate system, [as well as] border controls, are really essential. And the third thing is people’s behaviour. That is, the behaviour of social distancing, of… making sure there’s good ventilation [when you’re indoors], or if there’s not, wearing face masks, and [keeping up] hand and surface hygiene."

"We will need to keep these going in the long term, and that will be good not only for Covid but also to reduce other [diseases] at a time when the NHS is [struggling]… I think forever, to some extent…"

"I think there’s lots of different behaviours that we have changed in our lives. We now routinely wear seatbelts – we didn’t use to. We now routinely pick up dog poo in the parks – we didn’t use to. When people see that there is a threat and there is something they can do to reduce that [to protect] themselves, their loved ones and their communities, what we have seen over this last year is that people do that."

Michie’s comments once again emphasize how many scientific advisers have become drunk on COVID-19 power and never want to relinquish it.

“Unsurprisingly, Channel 5 News made absolutely no effort to scrutinise these claims. The programme’s presenter raised no objection to the idea that mask-wearing and social distancing could continue “forever”, resorting only to friendly laughter,” writes Michael Curzon.

“Professor Michie’s co-panellist, a fellow scientist at UCL, Dr Shikta Das, said:

“I think Susan has made a very good point here,” adding that the vaccine roll-out has created a “false sense of security”.

She concluded:

“I don’t think we are yet ready to unlock.”

How’s all that for balance!

Perhaps unsurprisingly, Michie is known to be a long-time Communist hardliner and was so zealous in her beliefs she garnered the nickname “Stalin’s nanny.”

Her sentiment echoes that of fellow government adviser Professor Neil Ferguson, who once acknowledged that he was surprised authorities were able to “get away with” the same draconian measures that Communist China imposed at the start of the pandemic.

“[China] is a communist one-party state, we said. We couldn’t get away with [lockdown] in Europe, we thought… and then Italy did it. And we realised we could,” said Ferguson.

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Tyler Durden Sat, 06/12/2021 - 11:30

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