Establishing Government-Private-Public Partnerships for Operational Continuity Through Subsidy Programs During Global Pandemics

The research has emerged from painful lessons learned from fighting against the challenges caused by the COVID-19 pandemic. Although the pandemic is hopefully tailing off, this study is still timely and crucial for mankind to get better prepared for dealing with the dilemma between public health and social and economic concerns during any possible global pandemics in the future. On one hand, governments must ensure the effectiveness of social distancing (SD) measures. On the other hand, businesses and the public must maintain continuity of economic and social activities. There is evidence that governments and businesses have no ready answers to problems produced by the pandemic and actions have not been guided by theoretically-studied policies in the early stages of COVID-19. A game-theoretic government-private-public-partnership (G3P) model is proposed to develop an optimal subsidy program for achieving the long-term goals of public health, economic development, and social welfare. Our analysis reveals that the structure of the optimal subsidy program relies on (a) the market types that emphasize the mass market versus the high-end market; and (b) whether there are well-implemented SD measures for higher-level public health. Moreover, we find that (1) governments can attain the three underlying goals by developing effective subsidy programs that are well budgeted within a certain range; and (2) businesses benefit from higher-level SD measures which contribute to guest maintenance and price stability, as well as higher-level public health. This research provides policy implications for developing effective government subsidy programs and managerial insights for business operational continuity.