Third Order Effects of Covid-19

6 April 2020
6 Apr 2020
2 min read

What I think is going to be interesting with Covid-19 are the third order effects. That is, the thing that gets affected way down the line, because the inputs are in disarray from dealing with Covid. For example, in order to protect teams, all of the major sports get cancelled. This then, affects sports betting (hard to bet on sports not being played currently). That then leads to a pent up demand on something to gamble on, which boosts adoption of eSports.

Another example that I’d hypothesize about is podcast demand. Because most of the country is currently working from home, no one is commuting. That is the main time podcast consumption takes place. Without that imputus, demand falls, meaning that the ads are seen by fewer and fewer people. Adding on the effect that certain genres of podcasts aren’t even taking place anymore (goodbye sports podcasts), and I’d imagine that most podcasts are feeling some sort of hurt.

One last example that I heard on Twitter included this example on rent freezes. What could seem like a good idea in the moment could actually be a bad idea long term.

Overall, I’m thinking more and more about how interconnected the entire economy is. With Covid-19 halting certain sectors, those ripples will continue to spread.

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