Hurricane Katrina in 2005 was the costliest natural disaster in the U.S., with estimates between $100 billion and $125 billion. The death toll of Katrina is still being debated, but we know that at least 2,000 were killed, and thousands were left homeless.
Worldwide, the toll is staggering. The triple disaster of an earthquake, tsunami and nuclear meltdown that started March 11, 2011 in Fukushima, Japan killed thousands, as did the 2010 Haiti earthquake.
The challenges to disaster relief organizations, including nongovernmental organizations (NGOs), are immense. The majority operate under a single, common, humanitarian principle of protecting the vulnerable, reducing suffering and supporting the quality of life. At the same time, they need to compete for financial funds from donors to ensure their own sustainability.
This competition is intense. The number of registered U.S. nonprofit organizations increased from 12,000 in 1940 to more than 1.5 million in 2012. Approximately $300 billion are donated to charities in the United States each year.
At the same time, many stakeholders believe that humanitarian aid has not been as successful in delivering on its goals due to a lack of coordination among NGOs, which results in duplication of services.
My team and I have been looking at a novel way to improve how we respond to natural disasters. One solution might be game theory.
Getting the right supplies to those in need is daunting
The need for improvement is strong.
Within three weeks following the 2010 earthquake in Haiti, 1,000 NGOs were operating in Haiti. News media attention of insufficient water supplies resulted in immense donations to the Dominican Red Cross to assist its island neighbor. As a result, Port-au-Prince was saturated with cargo and gifts-in-kind, so that shipments from the Dominican Republic had to be halted for multiple days. After the Fukushima disaster, there were too many blankets and items of clothing shipped and even broken bicycles.
In fact, about 60 percent of the items that arrive at a disaster site are nonpriority items. Rescue workers then waste precious time dealing with these nonpriority supplies, whereas victims suffer because they do not receive the critical needs supplies in a timely manner.
The delivery and processing of wrong supplies also adds to the congestion at transportation and distribution nodes, overwhelms storage capabilities and results in further delays of necessary items. The flood of donated inappropriate materiel in response to a disaster is often referred to as the second disaster.
The economics of disaster relief, on the supply side, is challenged as people need to secure donations and ensure the financial sustainability of their organizations. On the demand side, the victims’ needs must be fulfilled in a timely manner while avoiding wasteful duplication and congestion in terms of logistics.
Game theory in disasters
Game theory is a powerful tool for the modeling and analysis of complex behaviors of competing decision-makers. It received a tremendous boost from the contributions of the Nobel laureate John Nash.
Game theory has been used in numerous disciplines, from economics, operations research and management science, to even political science.
In the context of disaster relief, however, there has been little work done in harnessing the scope of game theory. It is, nevertheless, clear that disaster relief organizations compete for financial funds and donors respond to the visibility of the organizations in the delivery of relief supplies to victims through media coverage of disasters….(More)”