Allowing there to be an undersupply of medical resources and infection amid the social workforce, this paper proposes a theory to show how panic buying is induced and how bad the workforce status could be. By developing a novel general equilibrium model, we find that for any retail price that is higher than the buyer's reserve value, the buying competition will be induced and the medical resources supply will further be tightened. Moreover, if the transmission rate of COVID-19 surpasses the theoretical threshold that is proposed by this paper, the whole workforce in our simulated economy will inevitably be infected.
Keywords: COVID-19; general equilibrium; panic buying; workforce.