Boris Johnson has sown dangerous ambiguity over Covid rules with mixed messaging for Freedom Day

Sixty years ago, Daniel Ellsberg, as a graduate student at Harvard, wrote a now-seminal paper on behavioural economics. The conclusions of “Risk, ambiguity and the Savage axioms” pose a fundamental challenge to the conventional economic model of rational choice, as well as the Government’s current Covid strategy. 

Despite its seemingly esoteric nature, an experiment carried out by Ellsberg has important practical implications.

He presented people with an urn containing 50 black and 50 red balls, offering them first a bet to win if a red ball appeared and then a bet to win if a black was drawn. Unsurprisingly, the participants were indifferent between the two bets.

The next urn contained 100 balls with an unknown mix of red and black balls. The participants were offered the same bets, and many shrank away from taking the gamble.

This was the principle of “ambiguity aversion”: people knew there was a risk they would lose in the first experiment, but odds were clear. In the second, the uncertainty triggered widespread distaste. 

The same process has happened to the relaxation of lockdown measures, so riddled with ambiguity. From Monday, it will no longer be illegal to not wear a mask on public transport, ministers have said we will be “expected” to wear them. 

Throughout the Covid crisis, seemingly deliberately muddled what is law and what is merely guidance. Last year, most people did not mind –  they wanted protection above all else.

Now, with a clear majority of adults double vaccinated, there is a growing irritation with the ambiguity of the government’s messaging.

True, opinion polls suggest substantial numbers do not want the lockdown lifted, but these opinions are belied by the actions which people take. Traffic levels are above pre-pandemic levels, stadiums and bars are crowded.

There is a risk the ambiguity being sown by mixed-messaging will create an aversion to returning to real life. People don’t know which rules to follow and when and they don’t know which rules other people will be following and when. 

This is compounded by another, well-established concept in behavioural economics, known as the “peak-end” rule. 

In the 1990s, Nobel Laureate Daniel Kahneman formulated the peak-end rule from a series of imaginative experiments. Many of our experiences have well-defined beginnings and ends, for example we go into a restaurant, eat our meal and leave.

In such circumstances, Kahneman argued that our memories of them are not driven by how we feel about them on average over their entire duration, rather we judge them by a combination of how we felt when the experience was at its most intense, the peak, and right at the end.

A couple of months ago, vaccine euphoria was high and it looked like a positive end to the pandemic experience. Now this is dissolving into a series of ifs, buts and maybes.

The government should send a clear and unequivocal message:  very few otherwise healthy people are at risk of hospitalisation and death. For the double jabbed, the risk is even smaller. 

A small minority still need to take precautions. But the vast majority can now go about their lives in a perfectly normal manner.

Paul Ormerod
As published in City AM Wednesday 14th July 2021
Image: Pixahive

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Alex O’Byrne, Associate at Volterra, is an experienced economic consultant specialising in economic, health and social impact, economic strategy, project appraisal and socio-economic planning matters.

Alex has led the socio-economic and health assessments of some of the most high profile developments across the UK, including Battersea Power Station, Olympia London, London Resort, MSG Sphere and Westfield. He has significant experience inputting to EIAs and s106 discussions as well as drafting economic statements, employment and skills strategies and affordable workspace strategies.

Alex is also experienced at economic appraisal for infrastructure. He was project manager of the economic appraisal for the City Centre to Mangere Light Rail in Auckland. He also led the economic and financial appraisals of the third tranche of the Transport Access Program for Transport for New South Wales, in which Alex developed and employed innovative methodological approaches to better capture benefits for individuals with reduced mobility.

He is interested in the limitations of current appraisal methodologies and ways of improving economic and health analysis to ensure it is accessible to as many people as possible. To this end, Alex recognises the importance of transparent and simple to understand analysis and ensuring all work is supported by a robust narrative.

Alex holds a BSc (Hons) in Economics from the University of Manchester and he was a member of the first cohort of the Mayor’s Infrastructure Young Professionals Panel.


Senior Partner

t: +44 020 8878 6333

Ellie is a partner at Volterra, specialising in the economic impact of developments and proposals, and manages many of the company’s projects on economic impact, regeneration, transport and development.

With thirteen years experience at Volterra delivering high quality projects to clients across the public and private sector, Ellie has expertise in developing methods of estimating economic impact where complex issues exist with regards to deadweight, displacement and additionality.

Ellie has significant experience in estimating the economic impact across all types of property development including residential, leisure, office and mixed use schemes.

Project management of recent high profile schemes include the luxury hotel London Peninsula, Battersea Power Station and the Nova scheme at London Victoria. Ellie has also led studies across the country estimating the economic and regeneration impact of proposed transport investments, including studies on HS2 and Crossrail.

Ellie holds a degree in Mathematics and Economics from the University of Cambridge.