Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/242465 
Year of Publication: 
2021
Series/Report no.: 
Beiträge zur Jahrestagung des Vereins für Socialpolitik 2021: Climate Economics
Publisher: 
ZBW - Leibniz Information Centre for Economics, Kiel, Hamburg
Abstract: 
This paper develops a parsimonious model of individual exposure and of public health policy that can be used to study the evolution of an epidemic and the optimal use of lockdown policies and other non-pharmaceutical interventions. At the heart of individual exposure choices are the trade-offs between private utility derived from exposure and the risks of infection. Agents' utilities from private exposure are amplified by network benefits from social and economic activities, which amplifies the infection externality and constitutes a role for coordination policies due to multiple equilibria. We find that lockdowns do not prevail endogenously in equilibrium and that containment policy can significantly enhance welfare. Unpopularity of such contact restrictions imply that policy might face time inconsistency problems.
Subjects: 
Pandemics
Endogenous exposure
SIR-macro
Network effects;Externality
Time inconsistency
JEL: 
E52
E58
E61
E63
Document Type: 
Conference Paper

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