A game-theoretical approach for reciprocal security-related prevention investment decisions

Genserik Reniers and Karel Soudan

Reliability Engineering and System Safety, 2010, vol. 95, issue 1, 1-9

Abstract: Every company situated within a chemical cluster faces important security risks from neighbouring companies. Investing in reciprocal security preventive measures is therefore necessary to avoid major accidents. These investments do not, however, provide a direct return on investment for the investor-company and thus plants are hesitative to invest. Moreover, there is likelihood that even if a company has fully invested in reciprocal security prevention, its neighbour has not, and as a result the company can experience a major accident caused by an initial (minor or major) accident that occurred in an adjacent chemical enterprise. In this article we employ a game-theoretic approach to interpret and model behaviour of two neighbouring chemical plants while negotiating and deciding on reciprocal security prevention investments.

Keywords: Game theory; Reciprocal security; Nash equilibrium; Neighbouring chemical plants (search for similar items in EconPapers)
Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0951832009001653
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:reensy:v:95:y:2010:i:1:p:1-9

DOI: 10.1016/j.ress.2009.07.001

Access Statistics for this article

Reliability Engineering and System Safety is currently edited by Carlos Guedes Soares

More articles in Reliability Engineering and System Safety from Elsevier
Bibliographic data for series maintained by Catherine Liu ().