We analyze the implications of strategic interactions between two heterogeneous groups (i.e., young and old, men and women) in a macroeconomic–epidemiological framework. The interactions between groups determine the overall prevalence of a communicable disease, which in turn affects the level of economic activity. Individuals may lower their disease exposure by reducing their mobility, but since changing mobility patterns is costly, each group has an incentive to free ride negatively affecting the chances of disease containment at the aggregate level. By focusing on an early epidemic setting, we explicitly characterize the cooperative and noncooperative equilibria, determining how the inefficiency induced by noncooperation (i.e., failure to internalize epidemic externalities) depends both on economic and epidemiological parameters. We show that long-run eradication may be possible even in the absence of coordination, but coordination leads to a faster reduction in the number of infectives in finite time. Moreover, the inefficiency induced by noncooperation increases (decreases) with the factors increasing (decreasing) the pace of the disease spread.

Mobility Choices and Strategic Interactions in a Two-Group Macroeconomic–Epidemiological Model / D. La Torre, D. Liuzzi, R. Maggistro, S. Marsiglio. - In: DYNAMIC GAMES AND APPLICATIONS. - ISSN 2153-0785. - (2022), pp. 1-23. [Epub ahead of print] [10.1007/s13235-021-00413-z]

Mobility Choices and Strategic Interactions in a Two-Group Macroeconomic–Epidemiological Model

D. La Torre
Primo
;
D. Liuzzi
Secondo
;
S. Marsiglio
Ultimo
2022

Abstract

We analyze the implications of strategic interactions between two heterogeneous groups (i.e., young and old, men and women) in a macroeconomic–epidemiological framework. The interactions between groups determine the overall prevalence of a communicable disease, which in turn affects the level of economic activity. Individuals may lower their disease exposure by reducing their mobility, but since changing mobility patterns is costly, each group has an incentive to free ride negatively affecting the chances of disease containment at the aggregate level. By focusing on an early epidemic setting, we explicitly characterize the cooperative and noncooperative equilibria, determining how the inefficiency induced by noncooperation (i.e., failure to internalize epidemic externalities) depends both on economic and epidemiological parameters. We show that long-run eradication may be possible even in the absence of coordination, but coordination leads to a faster reduction in the number of infectives in finite time. Moreover, the inefficiency induced by noncooperation increases (decreases) with the factors increasing (decreasing) the pace of the disease spread.
Dynamic programming; Infectious diseases; Macroeconomic outcomes; Mobility choices; Noncooperative versus cooperative games;
Settore SECS-S/06 - Metodi mat. dell'economia e Scienze Attuariali e Finanziarie
2-dic-2021
Article (author)
File in questo prodotto:
File Dimensione Formato  
COVID_Game.pdf

accesso aperto

Tipologia: Pre-print (manoscritto inviato all'editore)
Dimensione 564.98 kB
Formato Adobe PDF
564.98 kB Adobe PDF Visualizza/Apri
Torre2021_Article_MobilityChoicesAndStrategicInt.pdf

accesso riservato

Tipologia: Publisher's version/PDF
Dimensione 996.71 kB
Formato Adobe PDF
996.71 kB Adobe PDF   Visualizza/Apri   Richiedi una copia
Pubblicazioni consigliate

Caricamento pubblicazioni consigliate

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: http://hdl.handle.net/2434/892874
Citazioni
  • ???jsp.display-item.citation.pmc??? 0
  • Scopus 0
  • ???jsp.display-item.citation.isi??? 1
social impact