IDEAS home Printed from https://ideas.repec.org/p/cpr/ceprdp/8112.html
   My bibliography  Save this paper

Recurrent Infection and Externalities in Prevention

Author

Listed:
  • Toxvaerd, Flavio

Abstract

This paper studies a model of disease propagation in which agents can control their exposure to infection by engaging in costly preventive behavior. Agents are assumed to be fully rational, strategically sophisticated and forward-looking. I show that on the transition path, optimal behavior is Markovian, stationary and myopic and there are no contemporaneous externalities. In steady state, in which infection is endemic, there are strategic substitutes. Individuals over-expose themselves to infection, leading to sub-optimally high steady state disease prevalence. Infectivity-reducing measures such as pre-exposure prophylaxis lead to strictly worse steady state levels of disease prevalence. While revealed preferences show that the first-best level of welfare must increase, rational disinhibition, which makes increased exposure to infection a rational response to such measures, may lead to decreased welfare under decentralization.

Suggested Citation

  • Toxvaerd, Flavio, 2010. "Recurrent Infection and Externalities in Prevention," CEPR Discussion Papers 8112, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:8112
    as

    Download full text from publisher

    File URL: http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=8112
    Download Restriction: CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Aadland David & Finnoff David C. & Huang Kevin X.D., 2013. "Syphilis Cycles," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 14(1), pages 297-348, June.
    2. Emily Oster, 2005. "Sexually Transmitted Infections, Sexual Behavior, and the HIV/AIDS Epidemic," The Quarterly Journal of Economics, Oxford University Press, vol. 120(2), pages 467-515.
    3. Scott Barrett, 2003. "Global Disease Eradication," Journal of the European Economic Association, MIT Press, vol. 1(2-3), pages 591-600, 04/05.
    4. Francis, Peter J., 1997. "Dynamic epidemiology and the market for vaccinations," Journal of Public Economics, Elsevier, vol. 63(3), pages 383-406, February.
    5. 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.
    6. Mark Gersovitz & Jeffrey S. Hammer, 2004. "The Economical Control of Infectious Diseases," Economic Journal, Royal Economic Society, vol. 114(492), pages 1-27, January.
    7. Oster, Emily, 2012. "HIV and sexual behavior change: Why not Africa?," Journal of Health Economics, Elsevier, vol. 31(1), pages 35-49.
    8. Auld M. Christopher, 2006. "Estimating Behavioral Response to the AIDS Epidemic," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 5(1), pages 1-29, April.
    9. Avner Ahituv & V. Joseph Hotz & Tomas Philipson, 1996. "The Responsiveness of the Demand for Condoms to the Local Prevalence of AIDS," Journal of Human Resources, University of Wisconsin Press, vol. 31(4), pages 869-897.
    10. Lembke B., 1918. "√ a. p," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 111(1), pages 709-712, February.
    11. Geoffard, Pierre-Yves & Philipson, Tomas, 1996. "Rational Epidemics and Their Public Control," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 37(3), pages 603-624, August.
    12. Francis, P.J. Peter J., 2004. "Optimal tax/subsidy combinations for the flu season," Journal of Economic Dynamics and Control, Elsevier, vol. 28(10), pages 2037-2054, September.
    13. Geoffard, Pierre-Yves & Philipson, Tomas, 1997. "Disease Eradication: Private versus Public Vaccination," American Economic Review, American Economic Association, vol. 87(1), pages 222-230, March.
    14. Michael Kremer, 1996. "Integrating Behavioral Choice into Epidemiological Models of AIDS," The Quarterly Journal of Economics, Oxford University Press, vol. 111(2), pages 549-573.
    15. Boulier Bryan L. & Datta Tejwant S. & Goldfarb Robert S, 2007. "Vaccination Externalities," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 7(1), pages 1-27, May.
    16. Toxvaerd, Flavio, 2010. "Infection, Acquired Immunity and Externalities in Treatment," CEPR Discussion Papers 8111, C.E.P.R. Discussion Papers.
    17. Hartl, Richard F., 1987. "A simple proof of the monotonicity of the state trajectories in autonomous control problems," Journal of Economic Theory, Elsevier, vol. 41(1), pages 211-215, February.
    18. Ume L Abbas & Roy M Anderson & John W Mellors, 2007. "Potential Impact of Antiretroviral Chemoprophylaxis on HIV-1 Transmission in Resource-Limited Settings," PLOS ONE, Public Library of Science, vol. 2(9), pages 1-11, September.
    19. 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.
    20. de Martí Beltran, Joan, 2009. "Matthew O. Jackson, Social and Economic Networks , Princeton University Press (2008)," Regional Science and Urban Economics, Elsevier, vol. 39(5), pages 644-645, September.
    21. Auld, M. Christopher, 2003. "Choices, beliefs, and infectious disease dynamics," Journal of Health Economics, Elsevier, vol. 22(3), pages 361-377, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Andrea Galeotti & Brian W. Rogers, 2013. "Strategic Immunization and Group Structure," American Economic Journal: Microeconomics, American Economic Association, vol. 5(2), pages 1-32, May.
    2. Jeremy Greenwood & Philipp Kircher & Cezar Santos & Michèle Tertilt, 2019. "An Equilibrium Model of the African HIV/AIDS Epidemic," Econometrica, Econometric Society, vol. 87(4), pages 1081-1113, July.
    3. Josephine G. Gatua, 2021. "Information and cooperation in preventive health behavior: The case of bed net use in rural Kenya," Health Economics, John Wiley & Sons, Ltd., vol. 30(9), pages 2124-2143, September.
    4. Aadland David & Finnoff David C. & Huang Kevin X.D., 2013. "Syphilis Cycles," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 14(1), pages 297-348, June.
    5. Cerdeiro, Diego A., 2017. "Contagion exposure and protection technology," Games and Economic Behavior, Elsevier, vol. 105(C), pages 230-254.
    6. 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.
    7. repec:esx:essedp:707 is not listed on IDEAS
    8. Matthew O. Jackson & Brian W. Rogers & Yves Zenou, 2017. "The Economic Consequences of Social-Network Structure," Journal of Economic Literature, American Economic Association, vol. 55(1), pages 49-95, March.
    9. Toxvaerd, Flavio, 2010. "Infection, Acquired Immunity and Externalities in Treatment," CEPR Discussion Papers 8111, C.E.P.R. Discussion Papers.
    10. Galeotti, Andrea & Rogers, Brian W, 2012. "Strategic Immunization and Group Structure," Economics Discussion Papers 9978, University of Essex, Department of Economics.
    11. repec:esx:essedp:716 is not listed on IDEAS
    12. Telalagic, S., 2012. "Optimal Treatment of an SIS Disease with Two Strains," Cambridge Working Papers in Economics 1229, Faculty of Economics, University of Cambridge.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Telalagic, S., 2012. "Optimal Treatment of an SIS Disease with Two Strains," Cambridge Working Papers in Economics 1229, Faculty of Economics, University of Cambridge.
    2. Sims, Charles & Finnoff, David & O’Regan, Suzanne M., 2016. "Public control of rational and unpredictable epidemics," Journal of Economic Behavior & Organization, Elsevier, vol. 132(PB), pages 161-176.
    3. Goyal, Sanjeev & Vigier, Adrien, 2015. "Interaction, protection and epidemics," Journal of Public Economics, Elsevier, vol. 125(C), pages 64-69.
    4. Barrett, Scott & Hoel, Michael, 2007. "Optimal disease eradication," Environment and Development Economics, Cambridge University Press, vol. 12(5), pages 627-652, October.
    5. David E. Bloom & Michael Kuhn & Klaus Prettner, 2022. "Modern Infectious Diseases: Macroeconomic Impacts and Policy Responses," Journal of Economic Literature, American Economic Association, vol. 60(1), pages 85-131, March.
    6. Toxvaerd, F. & Rowthorn, R., 2020. "On the Management of Population Immunity," Cambridge Working Papers in Economics 2080, Faculty of Economics, University of Cambridge.
    7. repec:esx:essedp:707 is not listed on IDEAS
    8. 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.
    9. Stéphane Mechoulan, 2007. "Market structure and communicable diseases," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 40(2), pages 468-492, May.
    10. Andrea Galeotti & Brian W. Rogers, 2013. "Strategic Immunization and Group Structure," American Economic Journal: Microeconomics, American Economic Association, vol. 5(2), pages 1-32, May.
    11. David Aadland & David Finnoff & Kevin X. D. Huang, 2016. "Behavioral Origins of Epidemiological Bifurcations," Vanderbilt University Department of Economics Working Papers 16-00004, Vanderbilt University Department of Economics.
    12. Terrence August & Tunay I. Tunca, 2006. "Network Software Security and User Incentives," Management Science, INFORMS, vol. 52(11), pages 1703-1720, November.
    13. Rikard Forslid & Mathias Herzing, 2015. "On the Optimal Production Capacity for Influenza Vaccine," Health Economics, John Wiley & Sons, Ltd., vol. 24(6), pages 726-741, June.
    14. Stéphane Mechoulan, 2007. "Market structure and communicable diseases," Canadian Journal of Economics, Canadian Economics Association, vol. 40(2), pages 468-492, May.
    15. David Aadland & David Finnoff & Kevin x.d. Huang, 2013. "The Equilibrium Dynamics of Economic Epidemiology," Vanderbilt University Department of Economics Working Papers 13-00003, Vanderbilt University Department of Economics.
    16. Sabine Liebenehm & Bernard Bett & Cristobal Verdugo & Mohamed Said, 2016. "Optimal Drug Control under Risk of Drug Resistance – The Case of African Animal Trypanosomosis," Journal of Agricultural Economics, Wiley Blackwell, vol. 67(2), pages 510-533, June.
    17. Marlène Guillon & Josselin Thuilliez, 2015. "HIV and Rational risky behaviors: a systematic review of published empirical literature (1990-2013)," Documents de travail du Centre d'Economie de la Sorbonne 15065, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    18. repec:hal:wpaper:halshs-01222571 is not listed on IDEAS
    19. Fenichel, Eli P., 2013. "Economic considerations for social distancing and behavioral based policies during an epidemic," Journal of Health Economics, Elsevier, vol. 32(2), pages 440-451.
    20. Troy Tassier & Philip Polgreen & Alberto Segre, 2015. "Vaccination Games with Peer Effects in a Heterogeneous Hospital Worker Population," Administrative Sciences, MDPI, vol. 5(1), pages 1-25, January.
    21. Aadland David & Finnoff David C. & Huang Kevin X.D., 2013. "Syphilis Cycles," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 14(1), pages 297-348, June.
    22. Eric Nævdal, 2012. "Fighting Transient Epidemics—Optimal Vaccination Schedules Before And After An Outbreak," Health Economics, John Wiley & Sons, Ltd., vol. 21(12), pages 1456-1476, December.

    More about this item

    Keywords

    Economic epidemiology; Preventive behavior; Rational disinhibition; Risk compensation;
    All these keywords.

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:8112. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://www.cepr.org .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (email available below). General contact details of provider: https://www.cepr.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.