Choosing What to Protect

We study a strategic model in which a defender must allocate defensive resources to a collection of locations, and an attacker must choose a location to attack. The defender does not know the attacker's preferences, while the attacker observes the defender's resource allocation. The defender's problem gives rise to negative externalities, in the sense that increasing the resources allocated to one location increases the likelihood of an attack at other locations. In equilibrium, the defender exploits these externalities to manipulate the attacker's behavior, sometimes optimally leaving a location undefended, and sometimes preferring a higher vulnerability at a particular location even if a lower risk could be achieved at zero cost. Key results of our model are as follows: (1) the defender prefers to allocate resources in a centralized (rather than decentralized) manner; (2) as the number of locations to be defended grows, the defender can cost effectively reduce the probability of a successful attack only if the number of valuable targets is bounded; (3) the optimal allocation of resources can be nonmonotonic in the relative value of the attacker's outside option; and (4) the defender prefers his or her defensive allocation to be public rather than secret.     

A Contested Identity: An Exploration of the Competing Social and Political Discourse Concerning the Identification and Positioning of Young People of Inter-Racial Parentage

The development of racial and ethnic identity of minority ethnicchildren and young people in contemporary multi-racial Westernsociety remains an important academic concern. More recently,a relatively new debate about the identity and ‘correct’labelling of children of inter-racial relationships has beenbrewing in British academic literature. Nowhere is this morevociferous and intense than in the field of social work. Thispaper identifies two competing perspectives vying for positionin this ideological and political battle. It is argued thatwhilst overall consensus may not be possible or even desirable,it is important to explore these ideological positions as theyplay a key role in influencing social work policy and practice.     

Factors affecting the perceived value of coins

Subjects were asked to judge the relative values or assign absolute values to coins similar to the proposed new UK 20p and £1 coins along with other metal blanks, prior to the announcement of the new coins. Preliminary studies indicated that while a ‘yellow’ (gold-coloured) coin would not normally be rated higher in value than the blank 5p coin, the addition of extra thickness and an elaborate edge enhanced its apparent relative value. It was also shown that seven-sided ‘white’ (silver-coloured) coins were rated as more valuable than 12-sided or circular coins of about the same diameter. The absolute values assigned to such coins followed a similar trend to the relative values. Seven-sided white coins were assigned higher values than 12-sided white coins, and thicker yellow coins were assigned higher value characteristics and colour were examined independently. For smooth circular, milled circular and seven-sided coins, ‘red’ (cooper-coloured) coins were perceived as least valuable, and white and yellow coins were equally often assigned to intermediate and high values. For red, white and yellow coins, smooth circular coins were rated least valuable and seven-sided coins as most valuable. It appears that people assign learned ‘rules’ about features indicating value in a systematic and independent manner.     

The effect of ‘experience’ on information preferences

A decision-maker's experience is thought to affect how he/she chooses the information that support his/her selection among alternatives. Unfortunately, results from empirical studies designed to demonstrate this hypothesis are not in agreement about the existence and/or extent of the relationship. Since one possible explanation for conflicting in results is variability in the operationalization of the variable ‘experience’, this study was designed to determine if it matters whether one chooses a macro view of experience (in which the focus is on a decision-maker's overall experience) or a micro view of experience (in which the focus is on specific experience with the decision under consideration). Additional insights regarding problems in operationalizing ‘experience’ were generated as a result of these analyses to provide a basis for further research in this area.     

A Note on the Composition of Verbal Response Forms

The Analysis of Verbal Behavior - This note is about composition—the process by which fragments of verbal behavior are combined in novel verbal forms. The note begins by discussing recent...     

Should the Model for Risk‐Informed Regulation be Game Theory Rather than Decision Theory?

Risk analysts frequently view the regulation of risks as being largely a matter of decision theory. According to this view, risk analysis methods provide information on the likelihood and severity of various possible outcomes; this information should then be assessed using a decision‐theoretic approach (such as cost/benefit analysis) to determine whether the risks are acceptable, and whether additional regulation is warranted. However, this view ignores the fact that in many industries (particularly industries that are technologically sophisticated and employ specialized risk and safety experts), risk analyses may be done by regulated firms, not by the regulator. Moreover, those firms may have more knowledge about the levels of safety at their own facilities than the regulator does. This creates a situation in which the regulated firm has both the opportunity—and often also the motive—to provide inaccurate (in particular, favorably biased) risk information to the regulator, and hence the regulator has reason to doubt the accuracy of the risk information provided by regulated parties. Researchers have argued that decision theory is capable of dealing with many such strategic interactions as well as game theory can. This is especially true in two‐player, two‐stage games in which the follower has a unique best strategy in response to the leader's strategy, as appears to be the case in the situation analyzed in this article. However, even in such cases, we agree with Cox that game‐theoretic methods and concepts can still be useful. In particular, the tools of mechanism design, and especially the revelation principle, can simplify the analysis of such games because the revelation principle provides rigorous assurance that it is sufficient to analyze only games in which licensees truthfully report their risk levels, making the problem more manageable. Without that, it would generally be necessary to consider much more complicated forms of strategic behavior (including deception), to identify optimal regulatory strategies. Therefore, we believe that the types of regulatory interactions analyzed in this article are better modeled using game theory rather than decision theory. In particular, the goals of this article are to review the relevant literature in game theory and regulatory economics (to stimulate interest in this area among risk analysts), and to present illustrative results showing how the application of game theory can provide useful insights into the theory and practice of risk‐informed regulation.