Game Theory in Disaster Relieve
Source: http://www.sfchronicle.com/news/article/Response-to-natural-disasters-like-Harvey-could-12115890.php
The article presents some insights about how game theory can be used to improve natural disaster relief, which I think is important, especially during the period that hurricane Irma and Maria are hitting the nation and continuously cause devastation. It is worth to notice that disaster relief organizations face huge challenges, as they need to compete for financial funds from limited donors to support operations and sustain themselves. Massive amounts of NGOs with limited resources – the scarce monetary resources poses a prisoner dilemma for those NGOs. When a NGO is competing against another NGO for delivering disaster relief, it can be modeled using the game theory: each player has the choice of delivering supplies using the easy route that will gain the most media exposure or the player can deliver supplies to the places with the most urgent need but will somehow be costly.
I can actually apply the game theory and Nash Equilibrium Model I learned in the lecture to the competing NGOs. The model works in this way. Each player will gain higher utility payoff if it chooses the easy route and the other party chooses the costly route – the easy route will help the player to gain more exposure, which is the determining factor for getting the financial resources. The most optimal result should be each player deliver supplies to the places with the most urgent needs. However, they will choose both to deliver supplies using the easy route because of higher utility payoffs. However, the optimal Nash equilibrium is not the optimal Nash equilibrium, as this strategy mix will result in congestion and unnecessary waste while the places with the urgent needs are not receiving supplies. In this case, competing NGOs result in resource allocation inefficiency, which is not effective disaster relief.
Therefore, in order to solve the problem, a generalized Nash Equilibrium Model with constraints can be applied. The limitation that NGOs have to make sure they delivered the minimum needed supplies at each demand point for the victims but do not exceed the maximum amounts set by a higher-level organization will ensure:
- There are competitive supplies that meet the overall demands
- Elimination of possibility of having under- or over-supply and the efficient allocation of resources once the minimum requirements are met.
Therefore, it helps both the NGOs and the society to achieve optimal outcomes.
This article presents an idea about how the game theory and Nash equilibrium model we learned in class can be extended by and applied in a field that originally seems not related to the concept at all. By adding a constraint to the model, the generalized Nash Equilibrium Model actually self-corrects the problems it brings. The constraints can be added by coordinating high-level managers, such as governors and managers and collaborations among competing parties can be achieved when constraints are added, therefore yielding better results for NGOS (more funds from donors) and more effective disaster relief.