The Credibility of Communication in a Pandemic.

Social distancing measures are typically recommended to contain the spread of infectious diseases. To improve the public's voluntary compliance, governments and health authorities seek to publicize timely information about the pandemic. Yet social planners may exaggerate or downplay their private information about the disease's severity to elicit their preferred level of social distancing. This is because the relative weight they assign to the costs of isolation over public health may be unbalanced, and people may not fully consider how their social distancing may influence others' infection risk. Consequently, messages and claims about the pandemic may be distrusted. The author investigates whether and when communication can be fully or partially credible despite apparent incentives for misrepresentation. The author finds that a government would communicate truthfully in equilibrium if and only if the disease severity levels are not too close to each other in the public's prior belief. Nevertheless, an increasing difference between the severity levels need not enhance the credibility of communication. Greater communication credibility may hurt social welfare. Moreover, as the government becomes more concerned about the costs of social distancing, its equilibrium messages may become more or less trustworthy. The article's results can benefit social planners and users of their messages (e.g., analysts, researchers, investors). [ABSTRACT FROM AUTHOR]