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Are better vaccines really better? The case of a simple stochastic epidemic SIR model

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  • Nicolas Houy

    (GATE Lyon Saint-Étienne - Groupe d'Analyse et de Théorie Economique Lyon - Saint-Etienne - ENS de Lyon - École normale supérieure de Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UJM - Université Jean Monnet - Saint-Étienne - CNRS - Centre National de la Recherche Scientifique)

Abstract

We consider a model of vaccine market where the buyer is centralized and shows an endogenous demand function based on a simple stochastic SIR model. When the seller is a monopoly, we show that better vaccines (in the sense of greater efficiency or inducing less side-effects) do not imply greater total surplus, greater buyer surplus or even greater profits. Since we consider a centralized buyer, our results cannot be caused by the well-known epidemiological externality of vaccination.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Nicolas Houy, 2013. "Are better vaccines really better? The case of a simple stochastic epidemic SIR model," Post-Print halshs-00927441, HAL.
    • Handle: RePEc:hal:journl:halshs-00927441
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    References listed on IDEAS

    as
    1. 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.
    2. 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.
    3. Xu, Xiaopeng, 1999. "Technological improvements in vaccine efficacy and individual incentive to vaccinate," Economics Letters, Elsevier, vol. 65(3), pages 359-364, December.
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    Cited by:

    1. 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.

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    More about this item

    Keywords

    Vaccines; Market structure; Monopoly; Epidemiology; SIR model;
    All these keywords.

    JEL classification:

    • I1 - Health, Education, and Welfare - - Health

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