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Contacts, Altruism and Competing Externalities


  • Toxvaerd, F.M.O.


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 the epidemic should differentiate between different types of tranmissive activities.

Suggested Citation

  • Toxvaerd, F.M.O., 2021. "Contacts, Altruism and Competing Externalities," Cambridge Working Papers in Economics 2135, Faculty of Economics, University of Cambridge.
  • Handle: RePEc:cam:camdae:2135
    Note: fmot2

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    References listed on IDEAS

    1. 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.
    2. Kimball, Miles S., 1987. "Making sense of two-sided altruism," Journal of Monetary Economics, Elsevier, vol. 20(2), pages 301-326, September.
    3. Collard, Fabrice & Hellwig, Christian & Assenza, Tiziana & Kankanamge, Sumudu & Dupaigne, Martial & Werquin, Nicolas & Feve, Patrick, 2020. "The Hammer and the Dance: Equilibrium and Optimal Policy during a Pandemic Crisis," CEPR Discussion Papers 14731, C.E.P.R. Discussion Papers.
    4. Flavio Toxvaerd, 2019. "Rational Disinhibition And Externalities In Prevention," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 60(4), pages 1737-1755, November.
    5. Theodore C. Bergstrom, 1999. "Systems of Benevolent Utility Functions," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 1(1), pages 71-100, January.
    6. David McAdams, 2020. "Nash SIR: An Economic-Epidemiological Model of Strategic Behavior During a Viral Epidemic," Papers 2006.10109,
    7. Dow, William H. & Philipson, Tomas, 1996. "An empirical examination of the implications of assortative matching on the incidence of HIV," Journal of Health Economics, Elsevier, vol. 15(6), pages 735-749, December.
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    Cited by:

    1. Christopher Avery, 2021. "A Simple Model of Social Distancing and Vaccination," NBER Working Papers 29463, National Bureau of Economic Research, Inc.
    2. Konstantin Matthies & Flavio Toxvaerd, 2023. "Rather doomed than uncertain: risk attitudes and transmissive behavior under asymptomatic infection," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 76(1), pages 1-44, July.
    3. McAdams, David & Song, Yangbo & Zou, Dihan, 2023. "Equilibrium social activity during an epidemic," Journal of Economic Theory, Elsevier, vol. 207(C).
    4. Bisin, Alberto & Gottardi, Piero, 2021. "Efficient policy interventions in an epidemic," Journal of Public Economics, Elsevier, vol. 200(C).
    5. Adriani, Fabrizio & Ladley, Dan, 2021. "Social distance, speed of containment and crowding in/out in a network model of contagion," Journal of Economic Behavior & Organization, Elsevier, vol. 190(C), pages 597-625.

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    More about this item


    Epidemics; altruism; infection externalities; socioeconomic externalities; disease control;
    All these keywords.

    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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