Nanoeconomics of Households in Lockdown Using Agent Models during COVID-19

Javier Cifuentes-Faura and Renaud Di Francesco
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Javier Cifuentes-Faura: Faculty of Economics and Business, University of Murcia, 30100 Murcia, Spain
Renaud Di Francesco: The Institution of Engineering and Technology, London WC2E 7, UK

Sustainability, 2022, vol. 14, issue 4, 1-13

Abstract: The world is experiencing a global pandemic with COVID-19, for which few measures have proven their efficiency. Prevention through lockdown belongs to the portfolio of Non-Pharmaceutical Intervention (NPI). The implementation of a lockdown comes with a potential health care benefit balanced with an economic and human cost: people are constrained to stay in their homes. Households hence have to live together in what we call “zero-space”, which means within the walls of their flat or house. The loss of “space-domain” freedom, preventing them to move in “free” space is accompanied by a continued “time-domain” freedom with the possibility to allocate their time, and what they do with it, within the location they are not permitted to leave (with very defined exceptions). We study the microeconomics framework in such a setting, starting from the rules shaping such a “nano-market” with very few agents (the members of the household), and its consequence for nano-economic interaction. Since the behaviour of the agents is hyperconstrained in the space domain and relatively free in the time domain, behavioral economics is used to describe decisions made in the home, for the actions remaining possible during lockdown. A minimal set of rules is introduced and illustrated to describe efficiently the agents at play in this new and particular context, which has been replicated worldwide during the pandemic. Hypotheses for this model are presented and discussed, so as to allow future variations and adaptations for other specific cases with different options chosen. Such hypotheses concern agents, their interests, behaviours, and the equivalent of non-financial “nano-market transactions and contracts”.

Keywords: COVID-19; nanoeconomics; microeconomics; behavioural economics; agent-based model (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
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