Domain 08
Health and Medicine
Public goods, commons and severe information asymmetry, layered on top of an agency relationship.
Vaccination is the cleanest public-goods case in ordinary life and the structure predicts the behaviour without needing anybody to be foolish: as coverage rises, individual benefit falls while individual cost stays, so uptake plateaus below the collective optimum. Antimicrobial resistance is a textbook commons — each prescription individually defensible, the shared stock finite. Insurance is adverse selection, which is why voluntary pools attract the people expecting to claim and why mandates exist. And payment models are pure agency: fee-for-service and capitation each produce exactly what they pay for.
The immunocompromised and the not-yet-born, who receive the benefit of collective protection and have no move in producing it. Also future patients, who bear the cost of today's antibiotic use and are represented by nobody in the consulting room.
What to look for
- Is the benefit individual or collective? They come apart, and that is the whole issue.
- Is this resource shared and finite? Then reasonable individual use still exhausts it.
- Can the patient verify any of this? If not, what makes misleading them costly?
- What does the payment model actually pay for?
The shapes that run this field
Public Goods and the Free Rider
A non-excludable, non-rival good: contribution is privately costly and the return is shared, so it is underprovided.
Shape 06The Commons
A rival but non-excludable resource: each user's extraction imposes a cost spread across all users.
Shape 13Screening and Adverse Selection
Hidden information before the deal. The uninformed side designs the offer so that different types choose differently.
Shape 14Principal and Agent
A delegated task with unobservable effort and imperfectly aligned interests.
Shape 12Costly Signalling
A costly, observable action that reveals private information because faking it would not pay.
In practice
Public Goods and the Free Rider
Coverage plateauing below the level that protects everyone, with no individual behaving unreasonably.
The Commons
Each prescription individually defensible, the shared effectiveness finite and falling.
Screening and Adverse Selection
A voluntary insurance pool attracting mainly the people who expect to claim.