NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
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Benjamin T. Leyden

Cornell University
375D Warren Hall
Ithaca, NY 14853-7810

E-Mail: EmailAddress: hidden: you can email any NBER-related person as first underscore last at nber dot org
Institutional Affiliation: Cornell University

NBER Working Papers and Publications

August 2020Learning from Deregulation: The Asymmetric Impact of Lockdown and Reopening on Risky Behavior During COVID-19
with Edward L. Glaeser, Ginger Zhe Jin, Michael Luca: w27650
During the COVID-19 pandemic, states issued and then rescinded stay-at-home orders that restricted mobility. We develop a model of learning by deregulation, which predicts that lifting stay-at-home orders can signal that going out has become safer. Using restaurant activity data, we find that the implementation of stay-at-home orders initially had a limited impact, but that activity rose quickly after states’ reopenings. The results suggest that consumers inferred from reopening that it was safer to eat out. The rational, but mistaken inference that occurs in our model may explain why a sharp rise of COVID-19 cases followed reopening in some states.
 
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