Rachel, Lukasz;
(2025)
An Analytical Model of Behavior and Policy in an Epidemic.
American Economic Journal: Macroeconomics
(In press).
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Abstract
This paper examines the behavior of individuals susceptible to a deadly disease in a tractable equilibrium setting. We analytically characterize individually optimal mitigation behavior and the resulting equilibrium trajectory. Analysis is facilitated by a phase diagram. A key insight is that individually optimal behavior of those susceptible to the disease results in excessive caution. This behavior flattens the epidemic curve and prolongs the epidemic. In contrast, socially optimal behavior results in a higher infection rate, with a focus on minimizing cumulative deaths at minimum cost. The paper offers novel technical contributions and an improved understanding of externalities in econ-epi models.
| Type: | Article |
|---|---|
| Title: | An Analytical Model of Behavior and Policy in an Epidemic |
| Open access status: | An open access version is available from UCL Discovery |
| Publisher version: | https://www.aeaweb.org/articles?id=10.1257/mac.202... |
| Language: | English |
| Additional information: | This version is the author accepted manuscript. For information on re-use, please refer to the publisher’s terms and conditions. |
| UCL classification: | UCL UCL > Provost and Vice Provost Offices > UCL SLASH UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS > Dept of Economics |
| URI: | https://discovery.ucl.ac.uk/id/eprint/10207636 |
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