An Economic Framework for Vaccine Prioritization

43 Pages Posted: 17 May 2021 Last revised: 24 Jan 2022

See all articles by Mohammad Akbarpour

Mohammad Akbarpour

Stanford University

Eric B. Budish

University of Chicago - Booth School of Business

Piotr Dworczak

Northwestern University - Department of Economics

Scott Duke Kominers

Harvard University

Date Written: December 18, 2021

Abstract

We propose an economic framework for determining the optimal allocation of a scarce supply of vaccines that become gradually available during a public health crisis, such as the Covid-19 pandemic. Agents differ in observable and unobservable characteristics, and the designer maximizes a social welfare function over all feasible mechanisms -- accounting for agents' characteristics, as well as their endogenous behavior in the face of the pandemic. The framework emphasizes the role of externalities and incorporates equity as well as efficiency concerns. Our results provide an economic justification for providing vaccines immediately and for free to some groups of agents, while at the same time showing that a carefully constructed pricing mechanism can improve outcomes by screening for individuals with the highest private and social benefits of receiving the vaccine. The solution casts light on the classic question of whether prices or priorities should be used to allocate scarce public resources under externalities and equity concerns.

Keywords: COVID-19, vaccination, mechanism design, inequality

JEL Classification: C78, D47, D61, D63, D82

Suggested Citation

Akbarpour, Mohammad and Budish, Eric B. and Dworczak, Piotr and Kominers, Scott Duke, An Economic Framework for Vaccine Prioritization (December 18, 2021). Available at SSRN: https://ssrn.com/abstract=3846931 or http://dx.doi.org/10.2139/ssrn.3846931

Mohammad Akbarpour

Stanford University ( email )

Eric B. Budish

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
773-702-8453 (Phone)

Piotr Dworczak

Northwestern University - Department of Economics ( email )

2003 Sheridan Road
Evanston, IL 60208
United States

Scott Duke Kominers (Contact Author)

Harvard University ( email )

Rock Center
Harvard Business School
Boston, MA 02163
United States

HOME PAGE: http://www.scottkom.com/

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