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Self-Protection, Strategic Interactions, and the Relative Endogeneity of Disease Risks

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  • Reeling, Carson J.
  • Horan, Richard D.

Abstract

Self-protection is a key behavior that influences infectious disease risks. Spillovers in disease protection create different types of strategic interactions. Under certain conditions, multiple Nash equilibria may arise with the possibility of coordination failure involving excessively low self-protection, in which case individuals' expectations of others' efforts determine which outcome arises. In prior studies, assumed technical relations between self-protection and infection probabilities drove the strategic interactions. We demonstrate that strategic relations can be endogenously determined and depend on the relative endogeneity of risk (RER), defined here as the degree to which individuals can take control of their own risks in a strategic setting. The potential for coordination failure may arise when RER is sufficiently small, whereas larger levels of RER may eliminate this possibility to ensure larger levels of self-protection. We find that imposing a behaviorally-dependent indemnity may increase RER to eliminate the possibility of coordination failure. We apply our analysis to the problem of livestock disease and illustrate the theory using a numerical example of the 2001 United Kingdom foot-and-mouth disease epidemic.
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Suggested Citation

  • Reeling, Carson J. & Horan, Richard D., 2013. "Self-Protection, Strategic Interactions, and the Relative Endogeneity of Disease Risks," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 149004, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea13:149004
    DOI: 10.22004/ag.econ.149004
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    Cited by:

    1. Carson Reeling & Richard D. Horan, 2018. "Economic Incentives for Managing Filterable Biological Pollution Risks from Trade," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 70(3), pages 651-671, July.
    2. William Brock & Anastasios Xepapadeas, 2024. "Land-use, climate change and the emergence of infectious diseases: A synthesis," DEOS Working Papers 2409, Athens University of Economics and Business.
    3. Klis, Anna A. & Melstrom, Richard T., 2020. "Strategic behavior and dynamic externalities in commercial fisheries," Ecological Economics, Elsevier, vol. 169(C).
    4. Carson Reeling & Leah H. Palm-Forster & Richard T. Melstrom, 2019. "Policy Instruments and Incentives for Coordinated Habitat Conservation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(3), pages 791-813, July.
    5. Tong Wang & David A. Hennessy, 2015. "Strategic Interactions Among Private and Public Efforts When Preventing and Stamping Out a Highly Infectious Animal Disease," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 97(2), pages 435-451.
    6. Hennessy, David A. & Zhang, Jing & Bai, Na, 2019. "Animal health inputs, endogenous risk, general infrastructure, technology adoption and industrialized animal agriculture," Food Policy, Elsevier, vol. 83(C), pages 355-362.
    7. Hennessy, David A. & Rault, Arnaud, 2023. "On systematically insufficient biosecurity actions and policies to manage infectious animal disease," Ecological Economics, Elsevier, vol. 206(C).

    More about this item

    Keywords

    Environmental Economics and Policy; Food Consumption/Nutrition/Food Safety; Livestock Production/Industries; Risk and Uncertainty;
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