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Contacts, Altruism and Competing Externalities

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  • Toxvaerd, Flavio

Abstract

This paper considers voluntary transmissive contacts between partially altruistic individuals in the presence of asymptomatic infection. Two different types of externalities from contacts are considered, infection externalities and socioeconomic externalities. When contacts are incidental, then externalities work through disease propagation. When contacts are essential, both infection and socioeconomic externalities are present. It is shown that for incidental contacts, equilibrium involves suboptimally high exposure whereas for essential contacts, equilibrium exposure is suboptimally low. An increase in altruism may thus increase or decrease disease transmission, depending on the type of contact under consideration. The analysis implies that policy to manage the epidemic should differentiate between different types of tranmissive activities.

Suggested Citation

  • Toxvaerd, Flavio, 2021. "Contacts, Altruism and Competing Externalities," CEPR Discussion Papers 15903, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:15903
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    Cited by:

    1. Christopher Avery, 2021. "A Simple Model of Social Distancing and Vaccination," NBER Working Papers 29463, National Bureau of Economic Research, Inc.
    2. Konstantin Matthies & Flavio Toxvaerd, 2023. "Rather doomed than uncertain: risk attitudes and transmissive behavior under asymptomatic infection," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 76(1), pages 1-44, July.
    3. McAdams, David & Song, Yangbo & Zou, Dihan, 2023. "Equilibrium social activity during an epidemic," Journal of Economic Theory, Elsevier, vol. 207(C).
    4. Bisin, Alberto & Gottardi, Piero, 2021. "Efficient policy interventions in an epidemic," Journal of Public Economics, Elsevier, vol. 200(C).
    5. Adriani, Fabrizio & Ladley, Dan, 2021. "Social distance, speed of containment and crowding in/out in a network model of contagion," Journal of Economic Behavior & Organization, Elsevier, vol. 190(C), pages 597-625.

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    More about this item

    Keywords

    Epidemics; altruism; Infection externalities; Socioeconomic externalities; Disease control;
    All these keywords.

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior

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