Optimal evacuation-decisions facing the trade-off between early-warning precision, evacuation-cost and trust - the Warning Compliance Model (WCM)

Marcus Wiens, Farnaz Mahdavian, Stephen Platt and Frank Schultmann

No 47, Working Paper Series in Production and Energy from Karlsruhe Institute of Technology (KIT), Institute for Industrial Production (IIP)

Abstract: In this article, we analyze the phenomenon of flood evacuation compliance from a both decision-theoretic and game-theoretic perspective presenting the Warning Compliance Model (WCM). This discrete decision model incorporates a Bayesian information system, which formalizes the statistical effects of a warning forecast based on the harmonious structure of a Hidden Markov Model (HMM). The game-theoretical part of the model incorporates the evacuation order decision of a local government and people's compliance regarding their evacuation-decisions. The strengths of this novel approach lie in the joint consideration of probabilistic and communicative risk aspects of a dynamic setting, in the simultaneous consideration of escalation and de-escalation phases and of two differently exposed risk groups, which requires differential risk communication. For each scenario, we derive the explicit and generic solution of the model, which makes it possible to identify the scope for warning compliance and its effects independent from the parameter constellation. Applying empirical data from flood and risk studies yields plausible results for the escalation-scenario of the model and reveal the limits of compliance if people face a Black Swan flood event.

Date: 2020
New Economics Papers: this item is included in nep-gth
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:kitiip:47

DOI: 10.5445/IR/1000125578

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