In this paper, we extend the classic SIR model to find an optimal lockdown policy to balance between the economy and people's health during the outbreak of COVID-19. In our model, we intend to solve a two phases optimisation problem: policymakers control the lockdown rate to maximise the overall welfare of the society; people in different health statuses take different decisions on their working hours and consumption to maximise their utility. We develop a novel method to estimate parameters for the model through various additional sources of data. We use the Cournot equilibrium to model people's behaviour. The analysis of simulation results provides scientific suggestions for policymakers to make critical decisions on when to start the lockdown and how strong it should be during the whole period of the outbreak.
Keywords: COVID-19; Equilibrium; Lockdown; Optimal Control; SIR.
© 2021 The Author(s). Published by Elsevier B.V.