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础耻迟丑辞谤蝉:听Mohammad E. Nikoofal & Mehmet Gumus

Publication:听IIE Transactions

Abstract:

The ability to understand and predict the sequence of events leading to a terrorist attack is one
of the main issues in developing pre-emptive defense strategies for homeland security. In this
paper, we explore the value of terrorist鈥檚 private information on government鈥檚 defense allocation
decision. In particular, we consider two settings with different informational structures.
In the first setting, the government knows the terrorist鈥檚 target preference but does not know
whether the terrorist is fully rational in his target selection decision. In the second setting,
the government knows the degree of rationality of the terrorist, but does not know the terrorist鈥檚
target preference. We fully characterize the government鈥檚 equilibrium budget allocation
strategy for each setting and show that the government makes resource allocation decisions by
comparing her valuation for each target with a set of thresholds. We then derive the value of
information (VOI) from the perspective of the government for each setting. Our results show
that VOI mainly depends on the government鈥檚 budget and the degree of heterogeneity among
the targets. In general, VOI goes to zero when government鈥檚 budget is high enough. But, the
impact of heterogeneity among the targets on VOI further depends on whether the terrorist鈥檚
target preference matches with government鈥檚 or not. Finally, we perform various extensions on
the baseline model and show that the structural properties of budget allocation equilibrium still
hold true.

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