Title: An Optimal Mechanism to Fund the Development of Vaccines against Emerging Epidemics
Date/Time: July 6, Thursday, 11:00 AM – 12:00 PM EST.
Abstract:
We derive the optimal funding mechanism to incentivize development and production of vaccines against diseases with epidemic potential. In the model, suppliers' costs are private information and investments are noncontractible, precluding cost-reimbursement contracts, requiring fixed-price contracts conditioned on delivery of a successful product. The high failure risk for individual vaccines calls for incentivizing multiple entrants, accomplished by the optimal mechanism, a (w+1)-price reverse Vickrey auction with reserve. Our analysis determines the optimal number of entrants and required funding level. Based on a distribution of supplier costs estimated from survey data, we simulate the optimal mechanism's performance in scenarios ranging from a small outbreak, causing harm in the millions of dollars, to the Covid-19 pandemic, causing harm in the trillions. We assess which mechanism features contribute most to its optimality.
Bio of the speaker: Here is Professor Christopher M. Snyder's bio:
https://sites.dartmouth.edu/csnyder/
This webinar will be offered online via Zoom. Please register to receive the Zoom link (one day before the webinar).
Registration link: libcal.dartmouth.edu/calendar/itc/2023DSAIW1
Look forward to seeing you at the webinar!
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Jianjun Hua
Dartmouth College
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