Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 2021-05-09
Number: 21-037/IV
Author-Name: S.J.G. van Wijnbergen
Author-Workplace-Name: University of Amsterdam
Title: Lockdowns as options
Abstract: I show that the irreversibility of dying coupled with gradual information acquisition over time on the likely arrival and eventual effectiveness of vaccines confers a real option value to lockdown strategies that delay the incidence of a pandemic.The case for lockdown strategies becomes stronger the more likely vaccine discovery is, and the less uncertainty exists about its effectiveness.
Classification-JEL: G12, G13, G18
Keywords: Pandemic Dynamics, Stochastic Vaccine arrival, information acquisition, irreversibility, lockdowns, real options
File-URL: https://papers.tinbergen.nl/21037.pdf
File-Format: application/pdf
File-Size: 622556 bytes
Handle: RePEc:tin:wpaper:20210037