Wednesday, December 5, 2012

Game Theory, Externalities, and Vaccinations

One of the problems with having an economist in your family is that, no matter how hard you try to fight against it, you get sucked into looking for interesting questions about human behavior.  Such is the burden that my wife bears.

Yesterday, our son had his one-year old round of vaccinations at the doctor's office which sparked a question from my wife, Katie.  But first, a little more background:

Like a lot of new moms, my wife spends a lot of time on Babycenter.com - it has a lot of baby-centric information as well as message-board/facebook-type community groups called "Birth Clubs" where new parents share questions and advice, etc with others whose kids were born the same month.  In all honestly, I am not a fan and am not a big believer in following anonymous internet parenting advice from people who for all I know could very well by 8 year olds or certified lunatics, but - that's beside the point.  My wife finds it enjoyable and helpful and so it must have some value, despite the fact the result of all advice seems to be that whatever I happen to be doing, I'm doing it wrong ;)

Anyway, the topic of vaccinations is a hot-button issue for many new parents these days.  The question of "should you vaccinate your kids?" has been in debate more strongly since the late 1990's when a (later proven fraudulent) study linking the measles-mumps-rubella vaccine to autism was published in a (then) respected medical journal called "The Lancet." Despite the fact that this study was proven to be fraudulent and retracted by The Lancet, resulting in the doctor losing his license to practice medicine, for many parents this fear of vaccination risks still lingers and there has been a steep decline in vaccination rates in recent years.

Rather than getting into a specific scientific debate on the merits and risks of vaccination, instead I'd like to focus on the interesting economic behavioral question Katie came up with.  There was one particular mom on her Babycenter forum that was pushing very strongly against vaccinations.  Katie's response was this: "Even if you didn't want to vaccinate your own kid, why would you campaign against other people doing it when that increases the risk that your kid will get sick?"

Putting this question in economic context, let's define a few things:  First, vaccines are a classic example of a positive externality, the opposite of the negative externality situation I explained a few weeks ago in this rather unnecessarily long post on pollution. If everyone around me gets a flu shot, then I get the benefit of a decreased risk of contracting the flu even if I don't bother to get one myself because I'm insulated from coming in contact with the virus if everyone else is flu-free.  Thus, I get the positive spillover benefits of everyone else's actions.  So you would expect that this would be the type of behavior you would want to encourage in others, not discourage if you were a rational decision maker.  Your incentive to do this is even stronger if you believe the vaccine to be risky because then, rather than taking on that risk yourself, you can let others do it for you (or, for your baby in the case of childhood vaccines).  Obviously, the problem is that if everyone behaves this way, then no one will get vaccinated and everyone will thus be at higher risk.  This is a classic "prisoner's dilemma" game-theoretic situation.

So why do people campaign so strongly against vaccines when it is directly against their own interests to do so (and, incidentally, when they are having to put in time and effort posting, researching, etc with no tangible reward)?  My answer to Katie was that they must care about everyone else's babies in addition to their own (or, in econ-speak, they derive altruistic utility from the well being of others).  Katie's response was something along the lines of "I certainly don't care about anyone else's baby enough that I would do something to put MY baby at higher risk" which I suppose tells you not to mess with our Ben when mama bear is around :)

There is also an interesting behavioral economics aspect to the presentation of medical risks.  When we get Ben's shots they give us a form outlining the vaccines and the possible side effects.  It's scary to read them - for instance, one of the ones he got yesterday had a 1 / 30,000 chance of a severe seizure reaction and then it also said "risk of permanent brain damage in extremely rare cases" whatever 'extremely rare' means.  When you see it laid out in black and white that way you think "wait, do I want to put him at risk for that?" whereas if it were framed as 29,999/30,000 children will have better health and no side effects, then I would probably view the exact same data differently.  We tend to be very bad at evaluating risk and probability and are very susceptible to framing issues like this, which I find interesting.  (For proof, consider the number of us who stupidly dropped $2 on a ticket for the $500 million powerball jackpot with a 1:175,223,510 chance of winning - myself included, although I was doing it for 'academic purposes'). For more on this topic of behavioral responses to information framing, there's a really good couple of chapters in Dan Ariely's book "Predictably Irrational" which I highly recommend.

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