Altruism, Social Interactions, and the Course of a Pandemic

Laura Alfaro, Ester Faia, Nora Lamersdorf () and Farzad Saidi ()
Additional contact information
Nora Lamersdorf: Frankfurt School of Finance & Management
Farzad Saidi: University of Bonn & CEPR

No 110, ECONtribute Discussion Papers Series from University of Bonn and University of Cologne, Germany

Abstract: Externalities and social preferences, such as patience and altruism, play a key role in the endogenous choice of social interactions, which in turn affect the diffusion of a pandemic or patterns of social segregation. We build a dynamic model, augmented with an SIR block, in which agents optimally choose the intensity of both general and group-specific social interactions. The equilibria in the baseline and the SIR-network model result from a matching process governed by optimally chosen contact rates. Taking into account agents’ endogenous behavior generates markedly different predictions relative to a naıve SIR model. Through a planner’s problem, we show that neglecting agents’ response to risk leads to misguided policy decisions. Mobility restrictions beyond agents’ restraint are needed to the extent that aggregate externalities are not curtailed by social preferences.

Keywords: social interactions; pandemics; SIR network models; social preferences; social planner; targeted policies (search for similar items in EconPapers)
JEL-codes: D62 D64 D85 D91 E70 I10 I18 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2021-08
New Economics Papers: this item is included in nep-dge, nep-net, nep-soc and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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https://www.econtribute.de/RePEc/ajk/ajkdps/ECONtribute_110_2021.pdf Second version, 2023 (application/pdf)

Related works:
Journal Article: Altruism, social interactions, and the course of a pandemic (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:ajk:ajkdps:110

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