Risk Management and Decision Processes Center - The Wharton School of the University of Pennsylvania

Interdependent Security

IDS games are a recently introduced class of models that captures a wide variety of collective risk and decision-making scenarios that include problems in airline security, corporate governance, computer-network security, supply-chain security, and vaccinations against diseases.

In particular, IDS models involve not only the likelihood of adverse events occurring, but also the ways in which their consequences can propagate through complex systems, or among large numbers of individuals. Results to date generally suggest focusing on (1) the weakest links in interdependent supply chains or other interconnected systems and (2) the economic incentives faced by the participants in these systems to invest in mitigation measures. Thus, for example, the elements of the system that pose the greatest risk may be neither those with the greatest incentive to invest in security nor the least-cost providers of security, suggesting a need for coordination mechanisms. Models for addressing and managing these kinds of strategic interactions have significant implications for risk management in a wide range of important societal problems.

Interactive Workshop on Interdependent Security
May 31-June 1, 2006
Co-sponsored by the Wharton Risk Center, the Center for Human Performance and Risk Analysis at the University of Wisconsin-Madison, and CREATE at the University of Southern California. Support from the National Science Foundation grant CMS-0527598 is acknowledged.

Center research projects and papers dealing with interdependent security:

Group Cooperation under Uncertainty, (Min Gong, Jon Baron, and Howard Kunreuther), Journal of Risk and Uncertainty

Deterministic and Stochastic Prisoner's Dilemma Games: Experiments in Interdependent Security, (Howard Kunreuther, Gabriel Silvasi, Eric T. Bradlow, Dylan Small) July 2007, NBER Technical Working Paper #341, Judgment and Decision Making, Vol. 4, No. 5, August 2009, pp. 363–384

Network Structure, Behavorial Considerations and Risk Management in Interdependent Security Games

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© 2006 The Wharton School, University of Pennsylvania