We derive the optimal funding mechanism to incentivize development and production of vaccines against diseases with epidemic potential. In the model, suppliers’ costs are private information and investments are noncontractible, precluding cost-reimbursement contracts, requiring fixed-price contracts conditioned on delivery of a successful product. The high failure risk for individual vaccines calls for incentivizing multiple entrants, accomplished by the optimal mechanism, a $(w+1)$-price reverse Vickrey auction with reserve, where $w$ is the number of selected entrants. Our analysis determines the optimal number of entrants and required funding level. Based on a distribution of supplier costs estimated from survey data, we simulate the optimal mechanism’s performance in scenarios ranging from a small outbreak, causing harm in the millions of dollars, to the Covid-19 pandemic, causing harm in the trillions. We assess which mechanism features contribute most to its optimality.

我们制定最佳的融资机制，以激励针对具有流行潜力的疾病的疫苗的开发和生产。在该模型中，供应商的成本是私人信息，投资是不可承包的，排除了成本补偿合同，需要以交付成功产品为条件的固定价格合同。个别疫苗的高失败风险需要激励多个进入者，通过最佳机制来实现，即$（w+1）$-价格反向维克瑞拍卖有保留，其中$w$是选定的参赛者的数量。我们的分析确定了最佳的进入者数量和所需的资金水平。根据调查数据估计的供应商成本分布，我们模拟了从造成数百万美元损失的小规模疫情到造成数万亿美元损失的 Covid-19 大流行等场景中最优机制的性能。我们评估哪些机制特征对其最优性贡献最大。