Abstract

We argue that the incentive structure of all individual and coordinated measures across countries to contain the corona-pandemic is that of a weakest-link public good game. We discuss a selection of theoretical and experimental key results of weakest-link games and interpret them in the light of the corona-pandemic. First, we highlight that experimental evidence does not support the assumption that coordination can be trivially solved, even among symmetric players. Second, we argue that for asymmetric countries the weakest-link game does not only pose a problem of coordination, but also a problem of cooperation. Third, we show how and under which conditions self-enforcing treaties can foster coordination and cooperation. We account for the possibility that countries make mistakes when choosing their actions. Our discussion shows that North–South cooperation is relevant and likely to be self-enforcing and that regional cooperation, e.g., within the EU, will also be important.

Highlights

  • The world is facing the worst pandemic in a century,1 caused by a new form of coronavirus.2 In a highly interconnected world, efforts to mitigate the effects of COVID-19 need to be coordinated, as an outbreak anywhere in the world puts all other countries at risk.3 That1 3 Vol.:(0123456789)A

  • To some extent, translating the success of coordination on smallpox to successful coordination on COVID-19 may be as difficult as translating the cooperation formula that was successful for the ozone layer to a much more complex problem like climate change (Barrett 2007b)

  • In order to explain the failure of coordination for symmetric payoffs in experiments, Caparrós et al (2020) suggest to consider a quantal response equilibrium (QRE) which is a Nash equilibrium in mixed strategies based on a probabilistic choice function (McKelvey and Palfrey 1995)

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Summary

Introduction

The world is facing the worst pandemic in a century, caused by a new form of coronavirus. In a highly interconnected world, efforts to mitigate the effects of COVID-19 need to be coordinated, as an outbreak anywhere in the world puts all other countries at risk. That. The situation will be even worse if serious outbreaks occur in developing countries or countries in transition, like currently observed for instance in Brazil and India This implies that cooperation, and coordination, is needed to address this pandemic. In the context of the eradication of smallpox and other infectious diseases, Barrett (2016) argued that the incentives are best described by such a game. Instead of focusing on eradication, we argue that, in the context of the COVID19, weakest-link type incentives go beyond the eradication of the disease Controlling outbreaks has this feature (e.g., social distancing, cellphone apps that trace contacts and the spread of the virus), individual decisions to wear a mask have this feature and providing a vaccine to all will eventually have this feature.

Non‐cooperative Theory Without Mistakes
Experimental Evidence
Non‐cooperative Behavioral Theory with Mistakes
Cooperative Theory Without Mistakes
Behavioral Cooperative Theory with Mistakes
Findings
Research Gaps and Concluding Remarks
Full Text
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