Pandemic Policy in a Global Game

Abstract

We study why some infectious diseases become pandemics whilst others get eradicated, and suggest a mechanism to prevent the next pandemic in a game of incomplete information. While eradication games of perfect information tend to have multiple equilibria, we show that, for a world consisting of N ≥ 2 countries, even a small amount of uncertainty leads to equilibrium uniqueness. In equilibrium, a pandemic may occur even though eradication would have been efficient, and less harmful diseases may cause more deaths. We then extend the game and, prior to an outbreak, let a subset of countries commit to eradication whenever it is not dominated. The equilibrium is again unique. Selection of the efficient no-pandemic equilibrium is facilitated by this type of international cooperation.

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