This year's Summer Workshop on Macroeconomics and Finance featured a poster session during which Piotr Dworczak presented the model and main results from his paper titled "An economic framework for vaccine prioritization" (co-authored with Mohammad Akbarpour, Eric Budish and Scott Duke Kominers). The workshop was co-organized by SGH Warsaw School of Economics and FAME|GRAPE. The event allowed Piotr to familiarize many interested listeners with his innovative market design take on the issue of optimal allocation of scarce resources in the presence of asymmetric information.

The issues investigated in the paper are tied closely to the IMD research agenda. In the paper, the authors propose an economic framework for determining the optimal allocation of a scarce supply of vaccines that become gradually available during a public health crisis, such as the Covid-19 pandemic. Agents differ in observable and unobservable characteristics, and the designer maximizes a social welfare function over all feasible mechanisms—accounting for agents’ characteristics, as well as their endogenous behavior in the face of the pandemic. The framework emphasizes the role of externalities and incorporates equity as well as efficiency concerns. Their results provide an economic justification for providing vaccines immediately and for free to some groups of agents, while at the same time showing that a carefully constructed pricing mechanism can improve outcomes by screening for individuals with the highest private and social benefits of receiving the vaccine. The solution casts light on the classic question of whether prices or priorities should be used to allocate scarce public resources under externalities and equity concerns.