Supplying masks to combat respiratory diseases : safety index, welfare and government involvement

Abstract

Coronavirus (COVID-19) is a highly infectious respiratory disease which spread can be effectively curbed by wearing facial masks, especially N95 and surgical masks. In this paper, we develop a stylised game-theoretical model to evaluate the impacts of producing and selling masks on supply chain profits, safety index and consumer and social welfare. Firstly, we find that as the infection probability without protection (IPWP) increases, both the retail price and demand for these masks will increase. When the IPWP is sufficiently low, those consumers who want to purchase masks are more likely to purchase N95 masks, but when the IPWP increases, surgical masks are more popular amongst consumers. Secondly, we develop a safety index that indicates the effectiveness of using masks in preventing respiratory disease infection. This index is especially crucial in cases where the IPWP is moderate; in other words, recommending to wear masks is particularly important when the IPWP is moderate. We also examine the impacts of government involvement in handling the outbreak of respiratory diseases. Providing consumer subsidies and promoting the social mask enterprise can effectively combat respiratory diseases under different conditions. Our results can be used for combating COVID-19 and preparing for future health crisess.