On Mask Wearing in Environments With and Without a Mask Mandate

We analyze an office environment with two types of workers. The first type believes that masks offer little or no protection against Covid-19 and hence this type does not wear a mask. The second type wants to protect itself from Covid-19 and therefore this type does wear a mask. By not wearing a mask, the first type of worker imposes an externality on the second type of worker. In this setting, we accomplish five tasks. First, ignoring the externality, we compute the number of hours during which the first type of worker does not wear a mask. Second, we ascertain the socially optimal number of hours during which a worker of the first type ought not to wear a mask. Third, we determine the optimal tax needed to decentralize the social optimum. Fourth, assuming that there is no mask mandate, we analyze the outcome when we allow for Coasian bargaining between the two types of workers. Finally, assuming that there is a mask mandate, we study the outcome when, once again, there is Coasian bargaining between the two types of workers.