Spring 2005 UMASS Amherst
Operations Research / Management Science Seminar Series

Date: Friday, March 11, 2005

Time: 11:00 AM
Location: Isenberg School of Management, Room 112

Speakers: Professors John Stranlund, Barry Field, and L. Joe Moffitt

Department of Resource Economics
University of Massachusetts at Amherst
Biographies: Professor John Stranlund is an Associate Professor and Graduate Program Director in the Department of Resource Economics at the University of Massachusetts at Amherst. Most of his research is focused on the theory of environmental policy. Professor Barry C. Field is a Professor in the Department of Resource Economics at the University of Massachusetts at Amherst. His academic interests are primarily in environmental economics and institutional economics. Professor L. Joe Moffitt is a Professor and Outreach Coordinator in the Department of Resource Economics at the University of Massachusetts at Amherst. Much of his research is on the economics of crop protection with particular emphasis on new technology and biosecurity.
TITLE: Inspections to Avert Terrorism:
 Robustness Under Severe Uncertainty

Abstract: Protecting against terrorist attacks requires making decisions in a world in which attack probabilities are largely unknown. The potential for very large losses encourages a conservative perspective, in particular toward decisions that are robust. But robustness, in the sense of assurance against extreme outcomes, ordinarily is not the only desideratum in uncertain environments. We adopt Yalov Ben-Haim’s (2001b) model of information gap decision making to investigate the problem of inspecting a number of similar targets when one of the targets may be attacked, but with unknown probability. We apply this to a problem of inspecting a sample of incoming shipping containers for a terrorist weapon. We show that robustness against failing to hold the probability of a successful terrorist attack to no more than some critical failure probability is increasing in the number of inspected vessels. However, robustness against the failure of a decision maker with an unknown degree of risk aversion to guarantee a minimum level of expected utility may not be monotonic. Indeed, there may be a large range of numbers of inspections for which more inspections leave the decision maker less secure.
This series is organized by the UMASS Amherst INFORMS Student Chapter. Support for this series is provided by the Isenberg School of Management, the Department of Finance and Operations Management, and the John F. Smith Memorial Fund.

For questions, please contact the INFORMS Student Chapter President, Ms. Tina Wakolbinger, wakolbinger@som.umass.edu