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Faculty of Economics


Cerdeiro, D.

Contagion Exposure and Protection Technology


Abstract: People adopt diverse measures to protect from contagion. I propose a taxonomy of protection technologies, and present a model to study the implications of the technology on the prevalence of infections and on welfare at different levels of exposure. I find that the effect of aggregate exposure on prevalence and on protection ineficiencies depends crucially on the characteristics of the available protection technology.For example, under certain conditions the existence of a vaccine will lead to lower infection rates and smaller welfare costs of decentralization as the society becomes denser. I discuss the implications for disease eradication, the equilibrium consequences of antigenic drift, the desirability of interventions in the absence of universal vaccines, and coordination failures in protection.


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