Skip to main content

Game Theory and Natural Disasters

Nagurney’s article sheds light on a timely application of game theory as natural disasters are attacking across the nation. She points out that there has been little work done in harnessing the scope of game theory in the context of disaster relief while game theory can provide very useful framework for both the government and the non-government organizations to plan responses and allocate resources more efficiently.

The economics of disaster relief has NGOs on the supply side and the victims’ needs on the demand side. The supply is challenged as people need to secure donations and ensure the financial sustainability of their organizations, and the supply must be fulfilled in a timely manner while avoiding wasteful duplication or logistical inefficiencies. She presents quite astounding data that 60 percent of the items arrived at a disaster site are non-priority items. She writes that the Nash Equilibrium Game Theory model provides managers of NGOs with a strategic framework to analyze their interactions with other NGOs, while also providing insights into their own operations.

I found her potential proposals of the application of game theory quite fascinating, and they resonate well with what we discussed in class. Multiple games are being set up, and the players involved are the natural disasters, the victims, and the different NGOS. For example, if the severity of a natural disaster is one player, and the NGO is the other. The payoff in this case would be the cost of sending the resources.

Another use case is applying Nash equilibrium in the context of transportation like the discussions we had in class. However, it is worth thinking about another factor that plays into this—relief organizations may choose a less costly route in delivering supplies rather than the route that will end in a destination where there are the most in need. The challenge is definitely a interesting one to tackle but currently has not been discussed in class.


Leave a Reply

Blogging Calendar

September 2017