DP4980 Can we Trust Private Firms as Suppliers of Vaccines for the Avian Influenza?
|Publication Date:||March 2005|
|JEL(s):||D42, D62, H10, I18, L10|
|Programme Areas:||Industrial Organization|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=4980|
Using a simple monopoly model, this note analyses the incentives of a vaccine producer. Because a vaccine tends to eradicate the disease for which 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.