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Recurrent Infection and Externalities in Prevention

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  • Toxvaerd, Flavio

Abstract

This paper studies a model of disease propagation in which agents can control their exposure to infection by engaging in costly preventive behavior. Agents are assumed to be fully rational, strategically sophisticated and forward-looking. I show that on the transition path, optimal behavior is Markovian, stationary and myopic and there are no contemporaneous externalities. In steady state, in which infection is endemic, there are strategic substitutes. Individuals over-expose themselves to infection, leading to sub-optimally high steady state disease prevalence. Infectivity-reducing measures such as pre-exposure prophylaxis lead to strictly worse steady state levels of disease prevalence. While revealed preferences show that the first-best level of welfare must increase, rational disinhibition, which makes increased exposure to infection a rational response to such measures, may lead to decreased welfare under decentralization.

Suggested Citation

  • Toxvaerd, Flavio, 2010. "Recurrent Infection and Externalities in Prevention," CEPR Discussion Papers 8112, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:8112
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    References listed on IDEAS

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    Cited by:

    1. Cerdeiro, Diego A., 2017. "Contagion exposure and protection technology," Games and Economic Behavior, Elsevier, vol. 105(C), pages 230-254.
    2. Andrea Galeotti & Brian W. Rogers, 2013. "Strategic Immunization and Group Structure," American Economic Journal: Microeconomics, American Economic Association, vol. 5(2), pages 1-32, May.
    3. Jeremy Greenwood & Philipp Kircher & Cezar Santos & Michèle Tertilt, 2019. "An Equilibrium Model of the African HIV/AIDS Epidemic," Econometrica, Econometric Society, vol. 87(4), pages 1081-1113, July.
    4. Josephine G. Gatua, 2021. "Information and cooperation in preventive health behavior: The case of bed net use in rural Kenya," Health Economics, John Wiley & Sons, Ltd., vol. 30(9), pages 2124-2143, September.
    5. Aadland David & Finnoff David C. & Huang Kevin X.D., 2013. "Syphilis Cycles," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 13(1), pages 297-348, June.
    6. Rowthorn, Robert & Toxvaerd, Flavio, 2012. "The Optimal Control of Infectious Diseases via Prevention and Treatment," CEPR Discussion Papers 8925, C.E.P.R. Discussion Papers.
    7. Toxvaerd, Flavio, 2010. "Infection, Acquired Immunity and Externalities in Treatment," CEPR Discussion Papers 8111, C.E.P.R. Discussion Papers.
    8. Matthew O. Jackson & Brian W. Rogers & Yves Zenou, 2017. "The Economic Consequences of Social-Network Structure," Journal of Economic Literature, American Economic Association, vol. 55(1), pages 49-95, March.
    9. Galeotti, Andrea & Rogers, Brian W, 2012. "Strategic Immunization and Group Structure," Economics Discussion Papers 9978, University of Essex, Department of Economics.
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    11. repec:esx:essedp:716 is not listed on IDEAS
    12. Telalagic, S., 2012. "Optimal Treatment of an SIS Disease with Two Strains," Cambridge Working Papers in Economics 1229, Faculty of Economics, University of Cambridge.

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    More about this item

    Keywords

    Economic epidemiology; Preventive behavior; Rational disinhibition; Risk compensation;
    All these keywords.

    JEL classification:

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

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