Journal article
Negative network effects and public policy in vaccine markets
Journal of economic behavior & organization, Vol.216, pp.136-149
12/2023
DOI: 10.1016/j.jebo.2023.10.005
Abstract
This paper provides a thorough analysis of an oligopolistic market for a vaccine, characterized by negative (demand-side) network externalities, which stem from the free-riding behavior of individuals engaged in a vaccination game. We investigate industry viability in terms of a standard natural Cournot-type learning process for network industries and show that viability tends to favor monopoly or competition among few suppliers. We confirm that market performance is highly inefficient, due to the combination of three imperfections: market power, network effects and a health externality (i.e., contagion). We investigate the extent of these imperfections. Finally, we devise a two-part government subsidy scheme for producers and consumers that may restore social efficiency in such markets.
Details
- Title: Subtitle
- Negative network effects and public policy in vaccine markets
- Creators
- Rabah Amir - University of IowaZhiwei Liu - Capital University of Economics and BusinessJingwen Tian - University of Iowa
- Resource Type
- Journal article
- Publication Details
- Journal of economic behavior & organization, Vol.216, pp.136-149
- DOI
- 10.1016/j.jebo.2023.10.005
- ISSN
- 0167-2681
- eISSN
- 1879-1751
- Language
- English
- Date published
- 12/2023
- Academic Unit
- Economics
- Record Identifier
- 9984487652902771
Metrics
8 Record Views