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Covid-19, Shelter-In Place Strategies and Tipping

Zhihan Cui, Geoffrey Heal, Howard Kunreuther

NBER Working Paper No. 27124
Issued in May 2020
NBER Program(s):Environment and Energy Economics, Health Economics

Social distancing via shelter-in-place strategies has emerged as the most effective way to combat Covid-19. In the United States, choices about such policies are made by individual states. Here we show that the policy choice made by one state influences the incentives that other states face to adopt similar policies: they can be viewed as strategic complements in a supermodular game. If they satisfy the condition of uniform strict increasing differences then following Heal and Kunreuther ([6]) we show that if enough states engage in social distancing, they will tip others to do the same and thus shift the Nash equilibrium with respect to the number of states engaging in social distancing.

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Document Object Identifier (DOI): 10.3386/w27124

 
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