Social Dilemmas

COVID-19 provides vivid examples of social dilemmas. For example, social distancing creates significant costs for young people, but health benefits are experienced across the community, and especially by older people and those with underlying health conditions. Sweden has taken a more "invisible hand" approach to COVID-19, leaving it up to individuals to decide whether to isolate themselves or not. Neighbouring countries, such as Denmark, have adopted a more interventionist approach, including government enforced lockdown.

Some background readings on Sweden's case can be found here:

https://www.nytimes.com/2020/07/07/business/sweden-economy-coronavirus.html

https://www.abc.net.au/news/2020-07-01/coronavirus-update-covid19-australia-european-union-nick-kyrgios/12408186#sweden [VIDEO, 29mins]

https://www.abc.net.au/news/2020-06-30/anders-tegnell-architect-of-the-swedish-model-coronavirus/12384966

https://www.abc.net.au/news/2020-04-07/coronavirus-sweden-adopting-more-flexible-approach/12118422

Task: Imagine you are participating in a debate on the COVID-19 response. Read CORE ESPP S2.3 and come up with one argument (for or against) the following proposition: Government action to enforce social distancing is not needed. People have social preferences and will isolate themselves to protect others in their community. Thus, the invisible hand of self-interest will maximise social benefits.