Mother Nature and Game Theory: Evaluating Hurricane Risks
It seems that the natural disaster of choice for the end of Summer 2017 has been hurricanes. Harvey devastated Southern Texas with torrential flooding a mere two weeks ago, and Irma’s danger looms as it approaches Florida. The damages caused by these natural disasters may be inescapable, but the option to evacuate flood-prone areas is a choice which residents have the ability to make. Utilizing game theoretic thinking, we can analyze how people evaluate hurricane risk.
In order to analyze how residents evaluate hurricane risks via game theory, we must first acknowledge the details and the drawbacks of this comparison. In this scenario, one player would be the resident (whose strategies are to either evacuate or stay), while the other player would be the weather. This scenario fits with the most basic definition of a game since the outcome depends not only on what strategy the resident chooses, but also on the choices of what they are interacting with. Of course, Mother Nature as the second player generates problems because you are not exactly sure what it is going to do (after all, how often are meteorologists actually accurate?). In addition, nature has no “payoffs,” it has nothing to gain or lose. Thus, for our simplified game, a more accurate description of the second player would be how we believe Mother Nature will affect us. In our simplified version, Nature’s strategies are either worst-case or best-case: for example, either your house gets flooded, destroying much of your livelihood, or it just rains pretty heavily for a few hours and then it’s over. Since only residents receive payoffs, we can interpret this payoff as the negative amount of money that they would have to spend. If evacuation costs $1000, worst-case scenario with evacuation: $5000, and the worst-case scenario without evacuation: $9000, we can generate the following payoff matrix:
In this matrix, if the resident believes that the storm will not affect them greatly, the resident’s best response would be to stay. If the resident believes the storm will be damaging, the resident’s best response would be to evacuate beforehand. However, the article link showcases that people’s abilities to access risks in these situations are rather irrational. The effects “associated with the last hurricane to make landfall in their county was the most powerful predictor of how coastal residents” anticipated the risks of the next big storm to be (Vox). This logic fails residents as it does not anticipate the unforeseen consequences of these unprecedented storms: what if the damage that occurs is detrimentally worse than the imagined “worst case scenario”. Unfortunately, this is what happened in Houston.
As a born and raised Houstonian, I watched from afar as my city drowned. However, this was not a completely new experience for Southern Texas: Houston has faced two other major flooding events in the past three years. Both of these caused city-wide damage and school cancellations, and Houstonians began to think of these events as the normal “worst-case scenario.” After all, they were damaging, but survivable. When the threat of Hurricane Harvey began, it was easy to assume that Harvey would be a similar experience to those previous floods. In the end, it was much worse. This bias affected what Houstonians believed Mother Nature’s “strategies” were and how they played this “game”.
There is another logistical aspect of evacuations which must be considered. Houston is a city of over six million, and evacuation is a logistical nightmare. In 2005, my family attempted to evacuate for Hurricane Rita. We spent four hours in evacuation route traffic only to move a mere five miles. After turning around, we stayed in our home throughout the storm and although there were two days of power outage, everything was fine. Experiences like these showcase that there is also an incentive for resident’s to not evacuate, for the payoff decreases when other residents decide to also evacuate.
Of course, this piece is a retrospective analysis on hurricane preparation and is subject to much hindsight bias. Still, utilizing game theory in this manner should make one wonder how we can better prepare for our next natural disaster. Further, we should consider whether it is always better to be safe rather than sorry as Southern Texas, the Caribbean, and Florida begin to heal.