Location of Repository

Market Structure and Communicable Diseases

By Stéphane Mechoulan

Abstract

Communicable diseases pose a formidable challenge for public policy. Using numerical simulations, we show under which scenarios a monopolist’s price and prevalence paths converge to a nonzero steady-state. In contrast, a planner typically eradicates the disease. If eradication is impossible, the planner subsidizes treatments as long as the prevalence can be controlled. Drug resistance exacerbates the welfare difference between monopoly and first best outcomes. Nevertheless, because the negative externalities from resistance compete with the positive externalities of treatment, a mixed competition/monopoly regime may perform better than competition alone. This result has important implications for the design of many drug patents.communicable disease, resistance, epidemiology, patent

OAI identifier:

Suggested articles

Preview


To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.