Game Theory in Disaster Relief
A direct result of the impending threat of climate change and warming of our planet is the growing prevalence of severe natural disasters. In fact, the number of disasters on Earth has doubled since 1980. In the last two decades alone, we’ve seen countless devastating disasters such hurricane Katrina in New Orleans and the earthquake/tsunami in Fukushima, Japan. Most recently, the city of Houston, Texas was hit with the Category 4 hurricane Harvey, resulting in nearly 50,000 people stranded in shelters in Texas and Louisiana. One of the largest challenges that result from these catastrophes is not only the monumental costs of relief, but instead the issues of fundraising and getting the relief supplies to where they are needed. Non-profit organizations compete for donations and to deliver supplies in the immediate aftermath of these disasters, but this often results in delays, unneeded items, and copious amounts of excess.
The article published on The Conversation proposes using game theory to alleviate these issues. This is done by coordinating non-profit organizations in receiving fundraising and the amount of relief supplies they deliver. The authors thus created two models: A competitive Nash Equilibrium free of minimum requirements and limits for supply volume, and a Generalized Nash Equilibrium in which these constraints exist. By doing so, they noticed that coordination is definitely needed, and the Generalized Nash Equilibrium model displayed how this coordination can be achieved. This model ensures that supplies are delivered to where they are needed, minimum requirements are met, and thus the non-profits are able to attract more donations. Furthermore, this model can be used by governments and organizations to proficiently provide the relief needed following a natural disaster.
This applies directly to the concept of Game Theory, as studied in class. Game Theory analyzes the outcomes of decisions of one party with respect to the decisions made by another. In the case of natural disasters, non-profit organizations compete to provide the assistance needed immediately after a natural disaster, however this results in incoordination and inadequate relief when not done properly. So, a Nash Equilibrium was proposed. A Nash Equilibrium is defined as a pair of strategies in which each player’s strategy is a best response to the other player’s strategy. By analyzing how a non-profit can interact based on the actions of others, a Nash Equilibrium model ensures that the best possible relief is provided that benefits all parties. The article and model are linked below.
Link: https://theconversation.com/response-to-natural-disasters-like-harvey-could-be-helped-with-game-theory-83125
Model: http://www.sciencedirect.com/science/article/pii/S1366554516303283