Evidence in the applied literature indicates that policies intended to stimulate positive externalities via coercion can backfire. For example, Davis (2008) finds that when in 1989, the government of Mexico City tried to control air pollution by banning most drivers from driving their vehicle...

Models with sunspot equilibria have long been a topic of interest among economists. It then became an interesting question to ask whether there is empirical support for their existence. One approach to answer this question is through lab experiments. Such equilibria have been successfully...

Prevention efforts often involve spillovers, positive or negative, on other individuals, but this is neglected by standard models of risk prevention.We analyze strategic interaction between decision makers whose effort affects each other's risk.We characterize response functions and Nash...

We use daily data from Lombardy, the Italian region most affected by the COVID-19 outbreak, to calibrate a SIR model individually on each municipality. These are all covered by the same health system and, in the post-lockdown phase we focus on, all subject to the same social distancing...