  Delays in the availability of vaccines are costly as the pandemic continues.
However, in the presence of adjustment costs firms have an incentive to
increase production capacity only gradually. The existing contracts specify
only a fixed quantity to be supplied over a certain period and thus provide no
incentive for an accelerated buildup in capacity. A high price does not change
this. The optimal contract would specify a decreasing price schedule over time
which can replicate the social optimum.
