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Discounting and precautionary behavior with an application to economic epidemiology

Latchezar Popov

Economic Theory Bulletin2025https://doi.org/10.1007/s40505-024-00286-6article
ABDC B
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0.50

Abstract

I develop a simple model of precautionary behavior in the context of avoiding an infectious disease. I show that in an infinite horizon model, the degree of caution is always nonmonotone in the discount factor; in extensions with finite number of periods or stochastic termination, the degree of caution is nonmonotone with sufficient number of periods or sufficiently low termination probability. I extend the model to allow interaction between agents using the SIR approach. I find that again, precautionary behavior is not monotone in the discount factor. With high discount factors, individual precautionary behaviors are strategic complements.

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https://doi.org/https://doi.org/10.1007/s40505-024-00286-6

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@article{latchezar2025,
  title        = {{Discounting and precautionary behavior with an application to economic epidemiology}},
  author       = {Latchezar Popov},
  journal      = {Economic Theory Bulletin},
  year         = {2025},
  doi          = {https://doi.org/https://doi.org/10.1007/s40505-024-00286-6},
}

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Discounting and precautionary behavior with an application to economic epidemiology

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Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

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