Seminars & webinars
11 December, 2020

Online Seminar | The Political Economy of Responses to COVID-19 in the USA


Where: online
Location:

GoToWebinar

Event's Timetable:

December 11, 2020 - h 4:00 PM

Information:

To participate please register here

Speaker:

Prof. Geoffrey Heal 
Graduate School of Business and School of International and Public Affairs, Columbia University

introduced by

Prof. Sergio Vergalli 
Fondazione Eni Enrico Mattei, University of Brescia, IAERE 

Abstract

Social distancing via shelter-in-place (SIP) strategies and wearing masks have emerged as the most effective ways to combat COVID-19. In the United States, choices about these policies are made by individual states. The authors show that the policy choice made by one state are strongly influenced by the choices made by others, and that these choices can be viewed as strategic complements in a supermodular game. Under certain conditions, if enough states engage in social distancing or mask wearing, they will tip others to do the same and thus shift the Nash equilibrium. Political orientation is an important factor in determining a state’s willingness to implement mask-wearing or SIP strategies. The authors consider a situation where interactions amongst states are strongest between those of similar political orientations and show there can be equilibria where states with different politics adopt different strategies. In this case a group of states of one political orientation may, by changing their choices, tip others of the same orientation but not those whose orientations differ. The authors test these ideas empirically using linear, probit and logit regression models and find strong confirmation that equilibria can be tipped as the theory predicts. Overall, policy choices are influenced by the choices of other states, especially those of similar political orientation, and to a much lesser degree by the number of new COVID-19 cases in the state. The choice of mask-wearing policy shows more sensitivity to the actions of other states than the choice of SIP policies. Both policies are influenced more by political than public health consideration.

The Political Economy of Responses to COVID-19 in the USA by Prof. Geoffrey Heal

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