Inspections To Avert Terrorism: Robustness Under Severe Uncertainty
Protecting against terrorist attacks requires making decisions in a world in which attack probabilities are largely unknown. The potential for very large losses encourages a conservative perspective, in particular toward decisions that are robust. But robustness, in the sense of assurance against extreme outcomes, ordinarily is not the only desideratum in uncertain environments. We adopt Yakov Ben-Haim’s (2001b) model of information gap decision making to investigate the problem of inspecting a number of similar targets when one of the targets may be attacked, but with unknown probability. We apply this to a problem of inspecting a sample of incoming shipping containers for a terrorist weapon. While it is always possible to lower the risk of a successful attack by inspecting more vessels, we show that robustness against the failure to guarantee a minimum level of expected utility might not be monotonic. Robustness modeling based on expected utility and incorporating inspection costs yields decision protocols that are a useful alternative to traditional risk analysis.
|Date of creation:||Mar 2005|
|Date of revision:|
|Contact details of provider:|| Web page: http://www.umass.edu/resec/|
More information through EDIRC
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.:
- Hadar, Josef & Russell, William R., 1971. "Stochastic dominance and diversification," Journal of Economic Theory, Elsevier, vol. 3(3), pages 288-305, September.
- Kelsey, D., 1991.
"Choice Under Partial Uncertainty,"
91-19, Department of Economics, University of Birmingham.
- Hadar, Josef & Russell, William R, 1969. "Rules for Ordering Uncertain Prospects," American Economic Review, American Economic Association, vol. 59(1), pages 25-34, March.
- Ouchi, Fumika, 2004. "A literature review on the use of expert opinion in probabilistic risk analysis," Policy Research Working Paper Series 3201, The World Bank.
When requesting a correction, please mention this item's handle: RePEc:dre:wpaper:2005-3. 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: (Eileen Keegan)
If references are entirely missing, you can add them using this form.