Are better vaccines really better? The case of a simple stochastic epidemic SIR model
AbstractWe consider a model of vaccine market where the buyer is centralized and shows an endogenous demand function based on a simple stochastic SIR model. When the seller is a monopoly, we show that better vaccines (in the sense of greater efficiency or inducing less side-effects) do not imply greater total surplus, greater buyer surplus or even greater profits. Since we consider a centralized buyer, our results cannot be caused by the well-known epidemiological externality of vaccination.
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Bibliographic InfoArticle provided by AccessEcon in its journal Economics Bulletin.
Volume (Year): 33 (2013)
Issue (Month): 1 ()
Contact details of provider:
Vaccines; Market structure; Monopoly; Epidemiology; SIR model.;
Find related papers by JEL classification:
- I1 - Health, Education, and Welfare - - Health
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- Forslid, Rikard & Herzing, Mathias, 2008. "On the Optimal Production Capacity for Influenza Vaccine," CEPR Discussion Papers 6808, C.E.P.R. Discussion Papers.
- Kessing, Sebastian G. & Nuscheler, Robert, 2006.
"Monopoly pricing with negative network effects: The case of vaccines,"
European Economic Review,
Elsevier, vol. 50(4), pages 1061-1069, May.
- Kessing, Sebastian & Nuscheler, Robert, 2003. "Monopoly pricing with negative network effects: the case of vaccines," Discussion Papers, Research Unit: Market Processes and Governance SP II 2003-06, Social Science Research Center Berlin (WZB).
- Xu, Xiaopeng, 1999. "Technological improvements in vaccine efficacy and individual incentive to vaccinate," Economics Letters, Elsevier, vol. 65(3), pages 359-364, December.
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