Market Structure and Communicable Diseases
AbstractCommunicable diseases pose a formidable challenge for public policy. Using numerical simulations, we show under which scenarios a monopolist’s price and prevalence paths converge to a nonzero steady-state. In contrast, a planner typically eradicates the disease. If eradication is impossible, the planner subsidizes treatments as long as the prevalence can be controlled. Drug resistance exacerbates the welfare difference between monopoly and first best outcomes. Nevertheless, because the negative externalities from resistance compete with the positive externalities of treatment, a mixed competition/monopoly regime may perform better than competition alone. This result has important implications for the design of many drug patents.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University of Toronto, Department of Economics in its series Working Papers with number tecipa-241.
Length: 37 pages
Date of creation: 27 Jun 2005
Date of revision:
Contact details of provider:
Postal: 150 St. George Street, Toronto, Ontario
Phone: (416) 978-5283
communicable disease; resistance; epidemiology; patent;
Other versions of this item:
- I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
- L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-07-09 (All new papers)
- NEP-CMP-2006-07-09 (Computational Economics)
- NEP-COM-2006-07-09 (Industrial Competition)
- NEP-HEA-2006-07-09 (Health Economics)
- NEP-MIC-2006-07-09 (Microeconomics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Mark Gersovitz & Jeffrey S. Hammer, 2004.
"The Economical Control of Infectious Diseases,"
Royal Economic Society, vol. 114(492), pages 1-27, 01.
- Alistair Munro, 1997. "Economics and biological evolution," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 9(4), pages 429-449, June.
- Goldman, Steven M. & Lightwood, James, 1996.
"Cost Optimization in the SIS Model of Infectious Disease with Treatment,"
Department of Economics, Working Paper Series
qt0r88q87t, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
- Goldman Steven Marc & Lightwood James, 2002. "Cost Optimization in the SIS Model of Infectious Disease with Treatment," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 2(1), pages 1-24, April.
- Steven M. Goldman and James Lightwood., 1996. "Cost Optimization in the SIS Model of Infectious Disease with Treatment," Economics Working Papers 96-245, University of California at Berkeley.
- Geoffard, Pierre-Yves & Philipson, Tomas, 1997. "Disease Eradication: Private versus Public Vaccination," American Economic Review, American Economic Association, vol. 87(1), pages 222-30, March.
- Gersovitz, Mark & Hammer, Jeffrey S., 2005. "Tax/subsidy policies toward vector-borne infectious diseases," Journal of Public Economics, Elsevier, vol. 89(4), pages 647-674, April.
- Brown, Gardner & Layton, David F., 1996. "Resistance economics: social cost and the evolution of antibiotic resistance," Environment and Development Economics, Cambridge University Press, vol. 1(03), pages 349-355, July.
- Philipson, Tomas, 2000.
"Economic epidemiology and infectious diseases,"
Handbook of Health Economics,
in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 33, pages 1761-1799
- Barrett, Scott & Hoel, Michael, 2007.
"Optimal disease eradication,"
Environment and Development Economics,
Cambridge University Press, vol. 12(05), pages 627-652, October.
- Daily, Gretchen C. & Ehrlich, Paul R., 1996. "Impacts of development and global change on the epidemiological environment," Environment and Development Economics, Cambridge University Press, vol. 1(03), pages 311-346, July.
- Stephen P. A. Brown & William C. Gruben, 1997. "Intellectual property rights and product effectiveness," Economic and Financial Policy Review, Federal Reserve Bank of Dallas, issue Q IV, pages 15-20.
- Francis, Peter J., 1997. "Dynamic epidemiology and the market for vaccinations," Journal of Public Economics, Elsevier, vol. 63(3), pages 383-406, February.
- Mark Gersovitz & Jeffrey S. Hammer, 2003. "Infectious Diseases, Public Policy, and the Marriage of Economics and Epidemiology," World Bank Research Observer, World Bank Group, vol. 18(2), pages 129-157.
- 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).
- 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.
- John B. Horowitz & H. Brian Moehring, 2004. "How property rights and patents affect antibiotic resistance," Health Economics, John Wiley & Sons, Ltd., vol. 13(6), pages 575-583.
- Scott Barrett, 2003. "Global Disease Eradication," Journal of the European Economic Association, MIT Press, vol. 1(2-3), pages 591-600, 04/05.
- Brito, Dagobert L. & Sheshinski, Eytan & Intriligator, Michael D., 1991. "Externalities and compulsary vaccinations," Journal of Public Economics, Elsevier, vol. 45(1), pages 69-90, June.
- Baumol, William J., 1996. "Antibiotics overuse and other threats," Environment and Development Economics, Cambridge University Press, vol. 1(03), pages 346-349, July.
- Herrmann, Markus & Nkuiya, Bruno & Dussault, Anne-Renée, 2013. "Innovation and antibiotic use within antibiotic classes: Market incentives and economic instruments," Resource and Energy Economics, Elsevier, vol. 35(4), pages 582-598.
- Herrmann, Markus & Nkuiya, Bruno & Dussault, Anne-Renée, 2013.
"Innovation and Antibiotic Use within Antibiotic Classes: Market Incentives and Economic Instruments,"
149731, University of Laval, Center for Research on the Economics of the Environment, Agri-food, Transports and Energy (CREATE).
- Markus Herrmann & Bruno Nkuiya & Anne-Renée Dussault, 2013. "Innovation and Antibiotic Use within Antibiotic Classes: Market Incentives and Economic Instruments," Cahiers de recherche CREATE 2013-3, CREATE.
- Na Hao & Gervan Fearon, 2009. "Government Funding Policy Towards Communicable Diseases," Atlantic Economic Journal, International Atlantic Economic Society, vol. 37(2), pages 121-134, June.
- Markus Herrmann, 2009. "Monopoly Pricing of an Antibiotic Subject to Bacterial Resistance," Cahiers de recherche 0946, CIRPEE.
- Herrmann, Markus, 2010. "Monopoly pricing of an antibiotic subject to bacterial resistance," Journal of Health Economics, Elsevier, vol. 29(1), pages 137-150, January.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (RePEc Maintainer).
If references are entirely missing, you can add them using this form.