Optimal epidemic control in equilibrium with imperfect testing and enforcement

DOI10.1016/J.JET.2022.105570zbMATH Open1506.92100arXiv2104.04455OpenAlexW3174758075MaRDI QIDQ2682017FDOQ2682017

Authors: Thomas Phelan, Alexis Akira Toda 

Publication date: 31 January 2023

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

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.

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

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zbMATH Keywords

efficiencyquarantineexternalitiesperfect Bayesian equilibriumlockdown

Mathematics Subject Classification ID

Epidemiology (92D30)

Cites Work

• Discounted Dynamic Programming
• Rational Epidemics and Their Public Control
• Public avoidance and epidemics: insights from an economic model
• Optimal Quarantine Programmes for Controlling an Epidemic Spread
• A mathematical analysis of public avoidance behavior during epidemics using game theory
• Integrating Behavioral Choice into Epidemiological Models of AIDS
• RATIONAL DISINHIBITION AND EXTERNALITIES IN PREVENTION
• Stationary Markov perfect equilibria in discounted stochastic games
• Internal and external effects of social distancing in a pandemic

Cited In (4)

• Economic epidemiological modelling: a progress report
• How optimal allocation of limited testing capacity changes epidemic dynamics
• Firm behavior during an epidemic
• Equilibrium social activity during an epidemic

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