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In following journal, it presented a simple static model and the effects of monopoly power on the supply side in the market for vaccines and highlighted the importance of income inequality when analyzing the monopolist's incentive to exploit the external effect of vaccinations to maximize its profits. Firstly, empirical evidence is the willingness to pay for vaccinations is likely to be increasing in income. It derives a sufficient condition on the utility function and the loss function for the individual willingness to pay to be globally increasing in income. Then it decision to vaccinate amounts to the choice between the certain outcome and the original risky outcome. Thus, the willingness to pay for vaccinations coincides with the risk premium. Since empirical evidence shows that the poor are more likely to remain without essential immunization, derived, using an insurance theoretic framework, a simple condition on the utility function and the loss function for the willingness to pay to be increasing in income. In the monopoly solution the poor are discriminated, i.e., remain susceptible, to increase the willingness to pay of the rich. Discrimination was found to be more severe if the prevalence elasticity of demand is high, i.e., when the income effect is low or the impact of the external effect is high.
Approximate Word count = 749
Approximate Pages = 3
(250 words per page double spaced)
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