Applying Game Theory to Balance Risk and Cost for Security Inspection Systems
The emergence of asymmetric threats, whether terrorist or insurgent, suggests a need to reexamine analytic methods applied to the design of risk mitigation systems. Emerging threats have shown ability to adapt strategies rapidly, suggesting that threat characterization must account for the response of the threat to defensive measures. We examine policies of targeting and random selection within checkpoint inspection systems, such as those used for seagoing containers. Specifically, we account for the effects of the transparency of targeting rules on the threat’s strategy preferences and ultimately on the requisite balance of targeted and random inspections. Static risk analysis fails in this case, because it does not take into account the effects of policy design on the threat’s strategy. We analyze inspection policy and process from the perspective of mathematical game theory. From this perspective we gain important insights into the role of targeting and are able to identify design factors that critically impact the balance between sunk cost and risk. We further extend the analysis by addressing the allocation of inspection resources over multiple checkpoints.
KeywordsInspection System Homeland Security Cargo Container Inspection Rate Balance Risk
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