Goal
This research extends the analysis of interdependent security to understand how different actors are responding to prospects of global change. Previously analyzed protective problems will be re-examined, plus the parallel analysis of decisions to reduce GHG emissions, from the standpoint of multiple goals, including avoiding penalties, avoiding censure, and becoming a partner in solving a commons problem. The key policy issue is to provide incentives for a group of countries to incur the necessary fixed costs and move first, thus tipping the remainder of the international community towards abatement. Analytically the non-convexities imply interdependence between agents not only with respect to exposure to risks but also with respect to the costs of action: a prior move by other agents will reduce an agent's costs of taking action.

Previous work has explored a range of parameter values leading to different equilibria for interdependent security problems. This project will continue with this method, using more complex utility functions as a crude representation of multiple goals.

Background
Recent findings from Kunreuther, Onculer, and Schade show how problem context impacts on decisions to engage in protective investment in an interdependent situation, suggesting that the nominal economic payoffs do not accurately represent the strategic situation: altruistic, affective and social goals are also likely to be active. This project will analyze how game-theoretic equilibria change as a function of the strength of social motives. It will consider both traditional Nash equilibria (where the underlying choice theory involves a maximization criterion and social goals are included in utility functions) and novel equilibrium concepts based on multiple goals and conjunctive choice criteria.

Research Questions
How can new technologies (e.g. identification and tracking protocols) aid in the reduction of global warming?

What is the recommended balance between government and private sector risk sharing and cost sharing for different risk reducing measures?

What strategies should be developed to encourage adoption of risk reducing measures (e.g. insurance, taxation, subsidies, coordinating mechanisms like global compacts)?

Related Material

»Society for Judgement and Decisionmaking Conference Presentation, November 2007: Protective Decision Making and Global Warming

Last Updated: June 1, 2006