Interaction, Protection and Epidemics

Goyal, S, and Vigier, A.

Individuals respond to the risk of contagious infections by restricting interaction and by investing in protection. We develop a model that examines the trade-off between these two actions and the consequences for infection rates.There exists a unique equilibrium: individuals who invest in protection choose to interact more relative to those who do not invest in protection. Changes in the contagiousness of the disease have non-monotonic effects: as a result interaction initially falls and then rises, while infection rates too may initial increase and then decline.We then consider a society with two communities that differ in their returns from interaction - High and Low. Individuals in isolated communities exhibit different behavior: the High community has a higher rate of protection and interaction, and a lower rate of infection. Integration amplifies these differences.