Cespic Working Paper 2022/02
Anna Balestra, Raul Caruso
This short paper presents a theoretical analysis which is intended to throw light on some issues related to supply of vaccines in a context where producer countries are involved in armed conflicts. We present a simple model which combines elements of Hirshleifer-style economic analysis of conflict and microeconomic modelling of oligopolistic markets. In particular, we apply a simple Cournot duopoly model to two producer countries. Findings show that world supply of vaccines is indirectly and negatively affected by the existence of armed conflicts in a producer country which is involved in an armed conflict. Yet such negative impact on supply also increases the world price. In brief, participation of producer countries into armed conflicts turns to be detrimental for global supply of vaccines. Such result is driven by: (i) the characteristics and the technology of conflict; (ii) the market structure.
