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Cooperation dynamics under pandemic risks and heterogeneous economic interdependence

Manuel Chica, Juan M Hernandez () and Francisco C. Santos

Chaos, Solitons & Fractals, 2022, vol. 155, issue C

Abstract: The spread of COVID-19 and ensuing containment measures have accentuated the profound interdependence among nations or regions. This has been particularly evident in tourism, one of the sectors most affected by uncoordinated mobility restrictions. The impact of this interdependence on the tendency to adopt less or more restrictive measures is hard to evaluate, more so if diversity in economic exposures to citizens’ mobility are considered. Here, we address this problem by developing an analytical and computational game-theoretical model encompassing the conflicts arising from the need to control the economic effects of global risks, such as in the COVID-19 pandemic. The model includes the individual costs derived from severe restrictions imposed by governments, including the resulting economic interdependence among all the parties involved in the game. By using tourism-based data, the model is enriched with actual heterogeneous income losses, such that every player has a different economic cost when applying restrictions. We show that economic interdependence enhances cooperation because of the decline in the expected payoffs by free-riding parties (i.e., those neglecting the application of mobility restrictions). Furthermore, we show (analytically and through numerical simulations) that these cross-exposures can transform the nature of the cooperation dilemma each region or country faces, modifying the position of the fixed points and the size of the basins of attraction that characterize this class of games. Finally, our results suggest that heterogeneity among regions may be used to leverage the impact of intervention policies by ensuring an agreement among the most relevant initial set of cooperators.

Keywords: Collective risk dilemma; Economic interdependence; Pandemic risks; COVID-19; Evolutionary game theory (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eee:chsofr:v:155:y:2022:i:c:s0960077921010092

DOI: 10.1016/j.chaos.2021.111655

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