public and private wildfire risk management: spatial and strategic interaction gwen busby, h.j....
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Public and Private Wildfire Risk Public and Private Wildfire Risk Management:Management:
Spatial and Strategic InteractionSpatial and Strategic Interaction
Gwen Busby, H.J. Albers, Claire MontgomeryGwen Busby, H.J. Albers, Claire Montgomery
May 8, 2007May 8, 2007
Game Theory and Strategic BehaviorGame Theory and Strategic Behavior
Game consists of:
1. Players
2. Strategies
3. Payoffs
Probability Values Survive Fire
Fuel treatment effort
The LandscapeThe Landscape
Public Private
Choice eg,w ep
Amenity
ValueAg,w Ap
Property
Value
Public Private
Choice eg,o ---
Amenity
ValueAg,o ---
Property
Value--- ---
WUI
Public and Private Ownership
Outside WUI
Only Public Ownership
v v)1(
Public’s Public’s ProblemProblem
Beec
ts
eAeevA
ogwg
ogogpwgwgee ogwg
)(
..
)}()(){(
,,
,,,,,
max,,
Private’s Private’s ProblemProblem
})())1({( ,max ceeevA ppwgpep
Social Social Planner’s Planner’s ProblemProblem )}(
)()()({
,,
,,,,,,
max,,
pogwg
pwgpwgogogeee
eeec
eeAvAeApogwg
kink
Private effort (ep)
Private effort (ep)
How does each player respond to How does each player respond to what the other is doing?what the other is doing?
Public effort (eg,w)
x-intercept
Public effort (eg,w)
y-intercept
kink
Public’s Response Function Private’s Response Function
Extreme Free Riding EquilibriaExtreme Free Riding Equilibria
Private effort (ep)
Public effort (eg,w)
Private effort (ep)
Public effort (eg,w)
Public’s Response Function Private’s Response Function
Shared Effort EquilibriumShared Effort Equilibrium
Private effort (ep)
Public effort (eg,w)
Public’s Response Function Private’s Response Function
0
5
10
15
20
25
30
35
40
45
0 1 2 3 4 5 6
Public's Budget (B)
Fuel
Rdu
ctio
n E
ffort
(e)
Public Effort Outside WUI Public Effort in the WUI
Private Effort in the WUI Socially Optimal Effort in the WUI
Socially Optimal Effort Outside the WUI Total Effort in the WUI
Equilibrium effort levels for: Ag,o =1; Ag,w=1; Ap=1; φ=0.5; v=2; c=0.1.
0
5
10
15
20
25
30
35
40
45
0 1 2 3 4 5 6 7 8
Public's Budget (B)
Fu
el
Red
ucti
on
Eff
ort
(e)
Public Effort Outside WUI Public Effort in WUI
Private Effort in WUI Socially Optimal Effort In and Outside the WUI
Total Effort in the WUI
Equilibrium effort levels for: Ag,o =4; Ag,w=1; Ap=1; φ=0.8; v=2; c=0.1.
0
5
10
15
20
25
30
35
40
45
0 0.2 0.4 0.6 0.8 1 1.2
Public's Fraction of Liability
Fu
el R
edu
ctio
n E
ffo
rt (
e)
Public Effort Outside the WUI Public Effort in the WUI
Private Effort in the WUI Socially Optimal Effort in the WUI
Socially Optimal Effort Outside the WUI Total Effort in the WUI
Equilibrium effort levels for: Ag,o =1; Ag,w=1; Ap=1; B=2; v=2; c=0.1.
Policy ImplicationsPolicy Implications
• WUI requirements should be removed from the Healthy Forest Restoration Act
• Reduce public liability
• Increase the valuation of undervalued (or un-priced) amenities outside the WUI
• Increasing public’s budget will not necessarily lead to increases in fuel reduction effort outside the WUI nor increases in total effort in the WUI
Main PointsMain Points
• Increasing public spending on fuel treatments in the WUI decreases private land owners’ incentives for fuel treatments.
• Given public budget constraints the more funds that are spent in the WUI, the less money that is available outside the WUI.
Objectives of Future Research
1. Spatially explicit landscape with public and private ownership.
2. Government regulation, liability rules, and private insurance
3. Best policies for typical ownership patterns