Basic strategies for risk management to minimize total damage due to COVID-19

Abstract

In this paper, risk management strategies to minimize total damage due to COVID-19 are proposed. Total damage includes direct and indirect damage by infection and regulation respectively. The regulation of people's activities involves trade-offs between direct and indirect damage; thus, risk management should consider them. In implementing risk management strategies, the government must engage in risk communication to change people's behavior. Furthermore, the expansion of medical capacity is also necessary for risk management. The theoretical mechanisms of how medical capacity expansion reduces optimal total damage due to COVID-19 and the optimal level of regulation is described.