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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 an epidemic should differentiate between different types of transmissive activities.

Suggested Citation

  • Toxvaerd, Flavio, 2024. "Contacts, altruism and competing externalities," European Economic Review, Elsevier, vol. 167(C).
    • Handle: RePEc:eee:eecrev:v:167:y:2024:i:c:s0014292124001235
    DOI: 10.1016/j.euroecorev.2024.104794
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    References listed on IDEAS

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    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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