Toxvaerd, F.M.O.

Contacts, Altruism and Competing Externalities

European Economic Review

Vol. 167 no. 104794 (2024)

Abstract: This paper considers voluntary transmissive contacts between partially altruistic individuals in the presence of asymptomatic infection. Two different types of externalities from contacts are considered, infection externalities and socioeconomic externalities. When contacts are incidental, then externalities work through disease propagation. When contacts are essential, both infection and socioeconomic externalities are present. It is shown that for incidental contacts, equilibrium involves suboptimally high exposure whereas for essential contacts, equilibrium exposure is suboptimally low. An increase in altruism may thus increase or decrease disease transmission, depending on the type of contact under consideration. The analysis implies that policy to manage an epidemic should differentiate between different types of transmissive activities.

Keywords: altruism, disease control, infection externalities, socioeconomic externalities

JEL Codes: D83, I12

Author links: Flavio Toxvaerd  

Publisher's Link: https://doi.org/10.1016/j.euroecorev.2024.104794

Cambridge Working Paper in Economics Version of Paper: Contacts, Altruism and Competing Externalities, Toxvaerd, F.M.O., (2021)