Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/237336 
Year of Publication: 
2021
Series/Report no.: 
ECONtribute Discussion Paper No. 091
Publisher: 
University of Bonn and University of Cologne, Reinhard Selten Institute (RSI), Bonn and Cologne
Abstract: 
Politicians, scientists and journalists have aired vastly different assessments of the COVID-19 pandemic, ranging from rather optimistic to very pessimistic ones. In this paper we investigate how narratives conveying different assessments of the pandemic impact economic behavior. In a controlled experiment with incentivized economic games we find that subjects behave more risk averse and less patiently when confronted with a pessimistic compared to an optimistic or balanced narrative. Further we find that narratives change subjects' expectations about the pandemic and the stock market. Hence our experiment provides causal evidence for an impact of narratives on fundamental determinants of household behavior.
Subjects: 
Narrative Economics
Risk Aversion
Patience
Expectations
JEL: 
D80
D91
E71
G41
Document Type: 
Working Paper

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