Environmental and Urban Economics

Microeconomists define a lulling effect to take place when an intervention (such as taking a dose of a vaccine) or a safety regulation (such as child proof bottle caps or vehicle airbags)  convinces an individual that she is less exposed to risk.  Such individuals, who now believe that they face less risk per unit of activity, are implicitly being encouraged to take more risk.  Given that demand curves slope down, a reduction in the price of risk taking encourages people to take on more risk. If the demand curve is highly price sensitive, an unintended consequence of a safety measure could be to put more of the population at risk.

As a Miami Heat fan who lives in Los Angeles right now, I marvel at the success of the NBA Bubble.  I am a fan of Jimmy Butler's grit.   The league has created a "safe space" featuring no infection for months.  The private sector (the NBA) achieved this.  Yes, the bubble is an island and yes plenty of $ has been spent to contain contagion risk but in this blog post, I would like to point out some relevant lessons.