How can understanding externalities and incentives help us better respond to COVID-19?

The benefits of vaccines extend beyond those receiving the shot (e.g. a "positive externality") and that means that vaccines are under-incentivized. There are a variety of institutions to try to correct this; during a pandemic, these institutions don’t work so well.

Every day without a COVID-19 vaccine means thousands of lives and billions of dollars lost. That means the positive externalities to the rapid development of a safe, effective vaccine are huge!

Alex Tabarrok dives into the positive externalities associated with vaccines and explains his research with Nobel Prize winner Michael Kremer, Susan Athey, and Chris Snyder on how to incentivize development of a vaccine for COVID-19.

***INSTRUCTOR RESOURCES***
This video’s classroom assignment: https://mru.io/mo0
Related COVID theme assignment on the incentives of ideas: https://mru.io/bqt
More high school teacher resources: https://mru.io/bf2
More professor resources: https://mru.io/77k
EconInbox: https://mru.io/evt
Try out our practice questions: https://mru.io/ckd

***MORE LEARNING***
More on externalities: https://mru.io/mu5
More on incentives: https://mru.io/zgl
Read more about Alex’s COVID proposal: https://www.nytimes.com/2020/05/04/opinion/coronavirus-vaccine.html