Seminario 27/01 – Guillaume Batallie (University of Luxembourg): The pandemic game : Vaccination, Treatment, and Eradication Incentives

Información

Abstract: Epidemic management typically combines public prevention policies
with privately supplied treatments. This paper develops a continuous-time SIS
epidemic model with vaccination and treatment to examine how such institutional
separation affects epidemic dynamics and disease eradication.
We first characterize the socially efficient benchmark, which may exhibit endemic
steady states, path dependence, and Sethi-Skiba thresholds. We then study a
differential game in which a government chooses vaccination while a
pharmaceutical firm determines treatment intensity. We identify a robust incentive
threshold that governs treatment behavior near the disease-free state. Finally, we
examine regulatory policies designed to correct this distortion. We show that
conventional treatment subsidies fail to eliminate the underlying incentive conflict,
whereas prevalence-based and treatment-compliance contracts can restore
eradication incentives.

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