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Optimal Antibiotic Usage with Resistance and Endogenous Technological Change

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  • Secchi, Silvia
  • Babcock, Bruce A.

Abstract

The authors develop an expected utility model with heterogeneous individuals and apply some of the approaches developed in the energy literature to explicitly identify the public nature characteristics of susceptibility in a dynamic setting and to characterize the optimal intertemporal usage problem from a social planner perspective. The authors determine the optimal time path for the depletion of susceptibility to an existing drug and show that use of antibiotics should be rationed across the population and through time. The authors also discuss the impact of endogenous technological change and analyze the dynamics of research activities in backstop technologies both in a certain and in an uncertain world. The authors show that resources invested in R&D should increase through time if the discovery process is uncertain.

Suggested Citation

  • Secchi, Silvia & Babcock, Bruce A., 2001. "Optimal Antibiotic Usage with Resistance and Endogenous Technological Change," Hebrew University of Jerusalem Archive 18499, Hebrew University of Jerusalem.
    • Handle: RePEc:ags:hebarc:18499
    DOI: 10.22004/ag.econ.18499
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    References listed on IDEAS

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    4. Tisdell, Clem, 1982. "Exploitation of Techniques That Decline in Effectiveness with Use," Public Finance = Finances publiques, , vol. 37(3), pages 428-437.
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    6. Goodin, Robert E., 1982. "Discounting Discounting," Journal of Public Policy, Cambridge University Press, vol. 2(1), pages 53-71, February.
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