An Agent-Based approach to high-cost drugs for infectious diseases

Andrea Caravaggio and Silvia Leoni

Working Papers - Economics from Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa

Abstract: The COVID-19 pandemic has underscored the need for modeling tools that account for the spatial and institutional heterogeneity underlying real-world epidemic dynamics. We develop a spatially structured agent-based model (ABM) in which decentralized health authorities (HAs) allocate costly treatments under local budget constraints to manage the spread of an infectious disease. Individuals are distributed across a grid of locations, with contagion governed by discrete-time Susceptible-Infected-Recovered (SIR) dynamics and spatial spillovers through local interactions. At each time step, HAs choose treatment intensity endogenously based on local infection levels, available resources, and pricing conditions. We analyze how key factors—such as treatment efficacy, pricing schemes, and initial outbreak distribution—shape both local and aggregate outcomes. In addition to a benchmark case with homogeneous pricing, we explore a parsimonious pricing scheme where prices vary across cells. Analytical results identify the threshold conditions for disease eradication, while simulations show how decentralized decisions and spatial feedback can generate persistent inequalities in infection and treatment. Our findings highlight the importance of integrating spatial structure, economic constraints, and pricing design in epidemic policy modeling.

Keywords: Agent-based modeling; health policy; infectious disease control; SIR model; treatment pricing. (search for similar items in EconPapers)
JEL-codes: C63 H51 I18 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2025
New Economics Papers: this item is included in nep-cmp
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.disei.unifi.it/upload/sub/pubblicazioni/repec/pdf/wp20_2025.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:frz:wpaper:wp2025_20.rdf

Access Statistics for this paper

More papers in Working Papers - Economics from Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa Via delle Pandette 9 50127 - Firenze - Italy. Contact information at EDIRC.
Bibliographic data for series maintained by Giorgio Ricchiuti ().