Goals and Plans in Protective Decision Making

Protective decisions are often puzzling. Among other anomalies, people insure against non-catastrophic events, underinsure against catastrophic risks, and allow extraneous factors to influence insurance purchases and other protective decisions. Neither expected utility theory nor prospect theory can explain these anomalies satisfactorily. We propose a constructed-choice model for general decision making. The model departs from utility theory and prospect theory in its treatment of multiple goals and it suggests several different ways in which context can affect choice. To apply this model to the above anomalies, we consider many different insurance-related goals, organized in a taxonomy, and we consider the effects of context on goals, resources, plans and decision rules. The paper concludes by suggesting some prescriptions for improving individual decision making with respect to protective measures.

The Costs and Benefits of Reducing Risk from Natural Hazards to Residential Structures in Developing Countries

This paper examines the benefits and costs of improving or retrofitting residential structures in highly exposed low- and middle-income developing countries such that they are less vulnerable to hazards during their lifetime. Since it is misleading to assess the benefits of prevention using deterministic models, the challenges for cost benefit analyses are to express avoided losses in probabilistic terms, evaluate and assess risk, monetize direct and indirect benefits and include dynamic drivers such as changing population, land use and climate. In detail, we examine structures exposed to three different hazards in four countries, including hurricane risk in St. Lucia, flood risk in Jakarta, earthquake risk in Istanbul and flood risk within the Rohini River basin in Uttar Pradesh (India). The purpose in undertaking these analyses is to shed light on the benefits and costs over time, recognizing the bounds of the analysis, and to demonstrate a systematic probabilistic approach for evaluating alternative risk reducing measures

Chapter 2 - Integrated risk and uncertainty assessment of climate change response policies

This framing chapter considers ways in which risk and uncertainty can affect the process and outcome of strategic choices in responding to the threat of climate change

Making Communities More Flood Resilient: The Role of Cost Benefit Analysis and Other Decision-support Tools in Disaster Risk Reduction

Given the series of large-scale flood disasters that have occurred in recent years, there is a growing recognition among community leaders, businesses, insurers, governments and international donors of the need to invest in risk reduction measures before such events happen. Due to the costs of risk reduction measures, these actions need to be justified and as a result there is an increasing need to utilize decision-support tools, which can help to make the case for action to reduce disaster risks and build flood resilience when faced with limited resources. Across stakeholders, the specific objectives from the use of decision-support tools include (i) demonstrating the efficiency of the action ex-ante (before the flood); (ii) aiding in the selection of a particular intervention in enhancing community flood resilience from a suite of possible options; (iii) helping communities make the right choice when faced with limited investments; (iv) demonstrating the benefits of donor funding of community flood resilience projects; and (v) monitoring the successes and weaknesses of past interventions to generate lessons learned for future work. Typically, discussion on decision-support for disaster risk reduction (DRR) in floods (as well as for other hazards) has focused on cost-benefit analysis (CBA), however there are a number of other tools available to support decision-making. These include cost-effectiveness analysis (CEA), multi-criteria analysis (MCA) and robust-decision-making approaches (RDMA), which have been applied to similar problems, and can also be used to aid decision-making regarding flooding. This white paper provides an overview of the opportunities and challenges of applying these different tools, and guides the reader to select among them. Selection depends on the desired objective, circumstances, data available, timeframe to perform analyses, level of detail, and other considerations. We first focus on the CBA decision-tool, as this has been the mainstay of research and implementation. We then go beyond CBA to consider the other techniques for prioritising DRR investments. While our analysis is specific to flood DRR actions, the conclusion are also applicable to other hazards. The key findings arising from this white paper with relevance to research, policy and implementation of flood DRR decision-support tools, are: (1) Following a comprehensive review of the quantitative CBA flood DRR evidence, we find that flood DRR investments largely pay off, with an average of five dollars saved for every dollar spent through avoided and reduced losses; (2) Using CBA for flood risk reduction assessment should properly account for low-frequency, high-impact flood events, and also tackle key challenges such as intangible impacts; (3) Decision-making can be improved by using various decision support tools tailored to the desired outcomes and contexts. This white paper is the foundation upon which the Zurich flood resilience alliance work on integration of a decision toolbox will proceed "on the ground," with established community-based risk assessment tools, in particular Vulnerability Capacity Assessments (VCA) or Participatory Capacity and Vulnerability Assessments (PCVA). Based on these findings we propose a way forward over the next several years on informing risk-based decision making as part of the alliance program

Are We Compromised? Modelling Security Assessment Games

Abstract. Security assessments are an integral part of organisations’ strategies for protecting their digital assets and critical IT infrastructure. In this paper we propose a game-theoretic modelling of a particular form of security assessment – one which addresses the question “are we compromised?”. We do so by extending the recently proposed game “FlipIt”, which itself can be used to model the interaction between defenders and attackers under the Advanced Persistent Threat (APT) scenario. Our extension gives players the option to “test ” the state of the game before making a move. This allows one to study the scenario in which organisations have the option to perform periodic security assessments of such nature, and the benefits they may bring.

Integrated Risk and Uncertainty Assessment of Climate Change Response Policies

Review of Uncertainty and climate chang

Operationalizing Resilience Against Natural Disaster Risk: Opportunities, Barriers, and a Way Forward

The risks from floods have been rising globally due to increasing population, urbanization and economic development in hazard prone areas. The number of flood disasters throughout the world nearly doubled in the decade from 2000-2009 compared to the previous decade. There have been more flood disasters in the last four years (2010-2013) than in the whole decade of the 1980's. Evidence indicates that climate change-induced sea level rise, storm surge and more intense flooding will reinforce this trend unless risk management measures are undertaken immediately to well manage future losses and make communities more resilient to flooding. It is widely recognized that there is a mutually reinforcing relationship between disaster risk and development: disasters impact development and development impacts disasters. Evidence shows that repeated disasters undermine long-term socio-economic objectives. This is particularly evident in low income countries where disasters can impede the development process. The extensive time required to recover from damage, loss of capacity with which to rebuild and systemic risk negatively affect livelihoods in these countries, in the extreme case trapping people in poverty. In developed countries, recent floods triggered massive economic losses and undermined long-term competitiveness. The impact of disasters is felt most acutely by households and communities. In both developing and developed countries alike, local level studies strongly indicate that the poor suffer disproportionately due to the lack of financial and social safety nets, and institutional representation. Development can affect disaster risk via three main channels: by (1) increasing the physical assets and people exposed to the risk, (2) increasing the capacity to reduce the risk, respond to the risk and recover from the risk and (3) increasing or decreasing the vulnerability based on specific development strategies chosen. We identify this interaction as a key research gap; taking account of and balancing development opportunities with disaster risk will require a paradigm shift in the way we think about and do both development and disaster risk management