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Equilibrium social activity during an epidemic

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  • McAdams, David
  • Song, Yangbo
  • Zou, Dihan

Abstract

During an infectious-disease epidemic, people make choices that impact transmission, trading off the risk of infection with the social-economic benefits of activity. We investigate how the qualitative features of an epidemic's Nash-equilibrium trajectory depend on the nature of the economic benefits that people get from activity. If economic benefits do not depend on how many others are active, as usually modeled, then there is a unique equilibrium trajectory, the epidemic eventually reaches a steady state, and agents born into the steady state have zero expected lifetime welfare. On the other hand, if the benefit of activity increases as others are more active (“social benefits”) and the disease is sufficiently severe, then there are always multiple equilibrium trajectories, including some that never settle into a steady state and that welfare dominate any given steady-state equilibrium. Within this framework, we analyze the equilibrium impact of a policy that modestly reduces the transmission rate. Such a policy has no long-run effect on society-wide welfare absent social benefits, but can raise long-run welfare if there are social benefits and the epidemic never settles into a steady state.

Suggested Citation

  • McAdams, David & Song, Yangbo & Zou, Dihan, 2023. "Equilibrium social activity during an epidemic," Journal of Economic Theory, Elsevier, vol. 207(C).
  • Handle: RePEc:eee:jetheo:v:207:y:2023:i:c:s0022053122001818
    DOI: 10.1016/j.jet.2022.105591
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    References listed on IDEAS

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    1. Dasaratha, Krishna, 2023. "Virus dynamics with behavioral responses," Journal of Economic Theory, Elsevier, vol. 214(C).

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    More about this item

    Keywords

    Equilibrium epidemic; Social activity; Oscillating behavior; Immunotherapy; Tuberculosis; Covid-19;
    All these keywords.

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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