Optimal Testing and Social Distancing of Individuals With Private Health Signals

Thomas Tröger ()
Authors registered in the RePEc Author Service: Thomas Troeger

CRC TR 224 Discussion Paper Series from University of Bonn and University of Mannheim, Germany

Abstract: We consider individuals who are privately informed about the probability of being infected by a potentially dangerous disease. Depending on its private health signal, an individual may assign a positive or negative value to getting tested for the disease. Individuals dislike social distancing. The government has scarce testing capacities and scarce resources for enforcing social-distance keeping. We solve the government's problem of setting up an optimal testing-and-social-distancing schedule, taking into account that individuals may lie about their private health signal. Rather than modelling the infection dynamics, we take a snapshot view, that is, we ask what should be done at a particular point in time to curb the current spread of the disease while taking the current well-being of the individuals into account as well. If testing capacities are sufficiently scarce, then it can be optimal to test only a randomly selected fraction of those who want to be tested, and require maximal social distancing precisely for those individuals who wanted a test and ended up not belonging to the tested fraction.

Pages: 41
Date: 2020-11
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