Optimal epidemic control in equilibrium with imperfect testing and enforcement

DOI10.1016/J.JET.2022.105570MaRDI QIDQ2682017zbMATH OpenOpenAlexFDO

Authors Thomas Phelan, Alexis Akira Toda

Publication date 31 January 2023

Published in Journal of Economic Theory (Search for Journal in Brave)

Copyright license Creative Commons Attribution 4.0 International

Full work available at URL https://arxiv.org/abs/2104.04455

zbMATH Keywords

efficiencyquarantineexternalitiesperfect Bayesian equilibriumlockdown

Mathematics Subject Classification ID

Epidemiology (92D30)

Abstract: We analyze equilibrium behavior and optimal policy within a Susceptible-Infected-Recovered epidemic model augmented with potentially undiagnosed agents who infer their health status and a social planner with imperfect enforcement of social distancing. We define and prove the existence of a perfect Bayesian Markov competitive equilibrium and contrast it with the efficient allocation subject to the same informational constraints. We identify two externalities, static (individual actions affect current risk of infection) and dynamic (individual actions affect future disease prevalence), and study how they are affected by limitations on testing and enforcement. We prove that a planner with imperfect enforcement will always wish to curtail activity, but that its incentives to do so vanish as testing becomes perfect. When a vaccine arrives far into the future, the planner with perfect enforcement may encourage activity before herd immunity. We find that lockdown policies have modest welfare gains, whereas quarantine policies are effective even with imperfect testing.

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Cited in

(13)

• The macroeconomics of testing and quarantining
• Optimal adaptive testing for epidemic control: combining molecular and serology tests
• How optimal allocation of limited testing capacity changes epidemic dynamics
• Testing, voluntary social distancing, and the spread of an infection
• Firm behavior during an epidemic
• Testing alone is insufficient
• A model of reporting and controlling outbreaks by public health agencies
• Antibody tests: they are more important than we thought
• Equilibrium social activity during an epidemic
• Economic epidemiological modelling: a progress report
• Static and dynamic inefficiencies in an optimizing model of epidemics
• Information and inequality in the time of a pandemic
• Internal and external effects of social distancing in a pandemic

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