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We develop a game-theoretic model of strategic interdependence and tipping in public policy choices and show that the model can be estimated by probit and logit estimators. We test its validity and applicability by using daily data on state-level COVID-19 responses in the United States. Social distancing via shelter-in-place (SIP) strategies and wearing masks emerged as the most effective nonpharmaceutical ways of combatting COVID-19. In the United States, choices about these policies are made by individual states. We develop a game-theoretic model of such choices and test it econometrically, confirming strong interdependence in the implementation of these policies. If enough states engage in social distancing or mask wearing, others will be tipped to follow suit. Policy choices are influenced mainly by the choices of other states, especially those of similar political orientation and to a lesser degree by the number of new COVID-19 cases. The choice of mask-wearing policies is more sensitive to peer choices than the choice of SIP policies, and Republican states are much less likely than Democratic to introduce mask-wearing policies. The choices of policies are influenced more by political than public health considerations. These findings emphasize strategic interdependence in policy choice and offer an analytical framework for these complex dynamics. [ABSTRACT FROM AUTHOR]

This paper provides a critical review of the literature on choosing social discount rates (SDRs) for public cost-benefit analysis. We discuss two dominant approaches, the first based on market prices and the second based on intertemporal ethics. While both methods have attractive features, neither is immune to criticism. The market-based approach is not entirely persuasive even if markets are perfect, and faces further headwinds once the implications of market imperfections are recognised. By contrast, the 'ethical' approach—which relates SDRs to marginal rates of substitution implicit in a single planner's intertemporal welfare function—does not rely exclusively on markets, but raises difficult questions about what that welfare function should be. There is considerable disagreement on this matter, which translates into enormous variation in the evaluation of long-run payoffs. We discuss the origins of these disagreements, and suggest that they are difficult to resolve unequivocally. This leads us to propose a third approach that recognises the immutable nature of some normative disagreements, and proposes methods for aggregating diverse theories of intertemporal social welfare. We illustrate the application of these methods to social discounting, and suggest that they may help us to move beyond long-standing debates that have bedevilled this field. (JEL D60, D61, D71, H43, H54) [ABSTRACT FROM AUTHOR]