Prevention as Adaptation Measure Against Natural Disasters in a Non-Cooperative Game (PAP014421)

Código

PAP014421

Autores

Oliver Fiala

Tema

Urban Floods

Resumo

After an increasing number of floods in different countries of Europe in the last years, the discussion about more effective adaption measures is of relevance to the present situation. Prevention measures have not only a damage-reducing effect for the region which enforce it, but also different effects on neighborly regions which can be seen as an externality. These externalities are analyzed in the present paper. We model a non-cooperative and simultaneous game where two actors decide about prevention measures and analyze possible equilibriums in dependence from the form of externality of the prevention measure. The individual decision as well as its influence on the other actor's effort crucially depends on the underlying externality of the prevention. Both positive and negative impacts of one's prevention effort on the prevention decision of the others are possible. In the case of a positive externality the prevention effort of one region provides particular protection for the other. In contrast, there is a negative externality, if the prevention effort of one individual increases losses of others. Dominant strategies and possible equilibriums are represented analytically and explained dependent on the form of the externality of the prevention.