On the Effect of Uncertainty on Personal Vaccination Decisions

Abstract

This paper investigates the effect of ambiguity on personal vaccination decision. We first characterize the vaccination decision in the absence of ambiguity. We then show that uncertainty about the probability of side effects and the efficacy of the vaccine always reduce take-up under ambiguity aversion. However, uncertainty about the underlying disease, being the probability of sickness or the probability of a severe course of disease, may either encourage or discourage vaccination. Our results are relevant for policy because reducing uncertainty associated with the vaccine always has the de-sired effect whereas reducing uncertainty associated with the disease may have unintended consequences.

Keywords: primary prevention, vaccination, uncertainty, ambiguity

JEL Classification: D11, D81, I12