Scandinavian Working Papers in Economics

Research Papers in Economics,
Stockholm University, Department of Economics

No 2005:2: Can We Trust Private Firms as Suppliers of Vaccine for the Avian Influenza?

Rikard Forslid ()
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Rikard Forslid: Dept. of Economics, Stockholm University, Postal: Department of Economics, Stockholm University, S-106 91 Stockholm, Sweden

Abstract: Using a simple monopoly model, this note analyses the incentives of a vaccine producer. Because a vaccine tends to eradicate the disease for wich it is intended, it also tends to destroy its own market. This means that monopolistic producers may be tempted, in a socially non-optimal way, to delay the introduction of vaccines against new infections until the disease has spread.

Keywords: Vaccines

JEL-codes: D42; D62; H10; I18; L10

5 pages, First version: February 22, 2005. Revised: February 6, 2006.

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