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Managing COVID-19 Tradeoffs: An Economic Lesson by a Pediatrician

By Shlomo Maital

   Well, it took a pediatrician to teach everyone a simple, powerful lesson in Economics. The pediatrician is Aaron E. Carroll, and he is Professor of Pediatrics at the Indiana University School of Medicine. His Op-Ed in today’s global New York Times * makes an important point.

   “…as we loosen restrictions in some areas, we should be increasing restrictions in others.”

   Simple? Obvious? As kids go back to school today, and joyously huddle with their friends, whom they haven’t seen for ages, the assumption is, if we’re clustering together in school, it’s OK to cluster together everywhere.

   It’s a free lunch. The logic is “both-and”. Both at school, and at home, and at parties, and …everywhere. Both-and is today’s social norm. We want it all.

   But there is a tradeoff at play here. If you take more risk in school, then you have to take less risk elsewhere, because – we cannot let risk rise infinitely, it is a kind of resource that is fixed in amount, and if we use too much of it, it will for sure come back and bite us hard…

     This is a very hard lesson for everyone to swallow, especially when the feeling is: We’ve quarantined, social-distanced for so long – now it’s over, time to huddle and cluster and gather.

     Not so. The second wave of COVID-19 has occurred mainly because of this false assumption.

     So let us each of us take responsibility and manage our risk tradeoffs. The question should be: what am I doing, that increases the risk of infecting myself and others? What can I do to reduce that, so that when I do join 10 others for prayer or socializing, my risk allocation is not excessive.

     Long ago, I taught managers a useful tool for managing business tradeoffs, known as “Even Swaps”, co-invented by Harvard Professor Howard Raiffa, a game-theory expert.** The idea here is simple. List all your options. Discard those that are ‘dominated’, that is – all other options are better in every way. This is easy.

    Next part is hard. For the remaining options, list the six common things for each that bring you joy. Score each 1 to 5, with 5 being “most joy”. Now — a short cut (Raiffa’s approach is more complex): Imagine yourself choosing each option: A, B, C….  and ask which– brings more joy? (Note: joy is not happiness…it is less ephemeral, less transient, deeper, with more meaning).

     And a supplemental tool. Of all the things I am now doing – ask yourself, which can I stop doing, totally, and as a result, find greater joy? In new product development, ‘addition’ (what feature can we add?) creates cluttered, costly, complicated, unfriendly devices. Best to start with subtraction: What can I REMOVE from this device, to make it better, friendlier, simpler, cheaper?   The same works in life. What can I stop doing? Specifically, what can I stop doing, that reduces risk of becoming infected and infecting others?

     The notion of giving up things we like is a tough one for modern society. Climate change policy, and its failures, are proof. But in a pandemic, as Dr. Carroll points out, recognizing trade-offs and managing them are vital. Thanks, Doc!  It took an MD to explain some basic Economics.

* “Most of us have the risk of COVID-19 exactly backwards”. Sept. 1, P. 11

** J S Hammond, R I Keeney, Howard Raiffa. “Even swaps: A rational method for making trade-offs”. Harvard Business Review, March-April 1998.

 Draw Your Riskometer

By Shlomo Maital

Tina Seelig’s Riskometer

Tina Seelig is a Stanford University professor, who teaches creativity and innovation. In a TED salon talk,

   She shows us how to change the way we relate to risk, and to luck. It all starts with leaving our comfort zone – being comfortable with being uncomfortable. And that, in turn, relates to taking risks…taking chances. But first, we need to look deeply into ourselves.

   So to do this, try Seelig’s riskometer. Draw a circle. Place on the circumference, six ‘realms”, or types of risk (financial, intellectual, social, political, emotional, physical.   On the spoke, mark the place where your risk appetite resides…’high’, close to the circumference, ‘low’, close to the center.

   Now – carefully consider, how you can improve your risk appetite, for realms where you are risk averse – and stuck in yourcomfort zone.

     Creativity is risky. It involves taking chances. The more comfortable you are with this, the more willing you will be, to come up with innovative ideas and, most important, to try them.

   By the way, the riskometer diagram above is Tina Seelig’s own. She needs some work on physical and financial risk. Tina – try sky diving. And,   buy a few Tesla shares….

Learning from Federer: Just Go For It

By Shlomo Maital

At the ripe old age of 36, Roger Federer has again won Wimbledon. Not only that – he won it without losing a single set — a feat last done decades ago by Bjorn Borg.  

   What’s his secret?   He’s happy to reveal it.   From his teens, he says he was careful to take care of his body. Fitness, eating right….   Pro tennis puts enormous strain on the body, and it has to be given tender loving care except when you’re on the court, when the start-stop violence rips ligaments, tendons, muscles and everything else.  

   This year, Federer was careful to ration the events in which he competed, pacing himself and his body.  He may well regain his #1 position this year.

   But Chris Clarey, who covers tennis for the New York Times, reveals another Federer secret.   Federer plays it safe when it is wise to do so, regarding fitness, scheduling, and lifestyle. But on court? He’s a risk-taker.

     “I wish we’d see more players and coaches taking chances at net [i.e., rushing to the net, and volleying], because good things happen at net, but you have to spend time up there to feel confident up there,” Federer said. At Wimbledon, Federer did ‘serve and volley’ (serve and then rush to the net) 16% of his service points – in other words one serve in six – and that doesn’t seem like much, but in fact it is more than double the 7% tournament average (i.e. servers rush the net one time out of every 14 serves].

     A key point here is: You have to serve and volley a lot, to get good at it. And you might lose points initially as a result. But – take risks, stick to it – and you will win.

     Now, I admit – Federer has totally out-of-this-world eye-hand coordination. And this is vital at the net.   But his wisdom applies to us in life.     Practice taking calculated risks, as General George S. Patton once said, especially when everyone else is playing it safe.  Over time, you get better at it.   Nothing ventured, nothing gained.

Blog entries written by Prof. Shlomo Maital

Shlomo Maital