Nature plays with dice - terrorists do not: Allocating resources to counter strategic versus probabilistic risks
Probabilistic uncertainty is caused by "chance", whereas strategic uncertainty is caused by an adverse interested party. Using linear impact functions, the problems of allocating a limited resource to defend sites that face either probabilistic risk or strategic risk are formulated as optimization problems that are solved explicitly. The resulting optimal policies differ - under probabilistic risk, the optimal policy is to focus the investment of resources on priority sites where they yield the highest impact, while under strategic risk, the best policy is to spread the resources so as to decrease the potential damage level of the most vulnerable site(s). Neither solution coincides with the commonly practiced proportionality allocation scheme.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Martin Shubik & Robert J. Weber, 1978. "Competitive Valuation of Cooperative Games," Cowles Foundation Discussion Papers 482, Cowles Foundation for Research in Economics, Yale University.
- Coughlin, Peter J, 1992. "Pure Strategy Equilibria in a Class of Systems Defense Games," International Journal of Game Theory, Springer;Game Theory Society, vol. 20(3), pages 195-210.
- Kaplan, Edward H. & Pollack, Harold, 1998. "Allocating HIV Prevention Resources," Socio-Economic Planning Sciences, Elsevier, vol. 32(4), pages 257-263, December.
- Martin J Osborne & Ariel Rubinstein, 2009.
"A Course in Game Theory,"
814577000000000225, UCLA Department of Economics.
When requesting a correction, please mention this item's handle: RePEc:eee:ejores:v:192:y:2009:i:1:p:198-208. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Shamier, Wendy)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.