The role of vaccine effectiveness on individual vaccination decisions and welfare

Abstract

This paper examines a theoretical model designed to characterize a static, individual vaccination decision environment. I identify and characterize both equilibrium and socially optimal vaccination behavior and determine how this behavior changes as the effectiveness of the vaccine changes. I also evaluate the individual and social welfare implications of a change in vaccine effectiveness. I find that under certain conditions, an increase in vaccine effectiveness can decrease the number of agents vaccinating in equilibrium due to the positive external effects of vaccination. Notably, it is also possible for individual and total welfare to decrease. This is an undesirable, and perhaps unexpected, consequence of better vaccines. Fortunately, welfare at the social optimum always increases as vaccine effectiveness increases. However, equilibrium behavior often falls short of the social optimum due to the positive externalities created by vaccinating.

Risk, trust, and altruism in genetic data sharing

“…Our results in the investment frame are aligned with typical results of standard trust games (Berg et al, 1995), where a robust finding is that trust accounts for a large portion of investment (Cox, 2004). As for our results in the genetic frame, they are consistent with a broader finding that people undergo preventive care (such as vaccines and genetic tests) solely for personal gain, without taking into consideration the benefits to society at large (Sorensen, 2023).…”

Simple economics of vaccination: public policies and incentives

“…On the other hand, the strategic models often ignore the benefits of vaccination, and include only the costs or disutilities. Disutilities have been defined in terms of monetary value (Galvani et al, 2007;Sorensen, 2023;Yamin et al, 2014); in terms of risk (Bauch, 2005;Bauch & Earn, 2004;Bauch et al, 2003;De Donder et al, 2021;Liu et al, 2012), or using other indicators (as Basu et al, 2008, who used QALYs).…”

Epidemics, vaccines, and health policy

“…The article by Amir, Garcia, et al (2023) considers an oligopolistic market for a vaccine, characterized by negative network effects, which stem from the free-riding behavior of individuals engaged in a vaccination game, as studied in detail by Sorensen (2023). While the latter study delves into the foundations for a demand side for vaccines, the present paper looks into the associated supply side, building on Amir, Liu, et al (2023).…”

“…The article by Sorensen (2023) presents an n-player, simultaneous-move game, designed to model individual vaccination decisions in a strategic setting. The vaccine is designed to protect against infection, which may occur from contact with any agent already infected with the contagious disease.…”