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A Game-Theoretic Model of Inspection-Resource Allocation.
Martin H Pearl1, Alan J Goldman1
1National Bureau of Standards, Washington, D.C. 20234.
Journal of Research of the National Bureau of Standards (1977)
|September 27, 2021
Summary
This study generalizes a game theory model for inspector-inspectee interactions. It analyzes how penalty levels and detection likelihood affect inspectee cheating and inspector strategies.
Area of Science:
- Game Theory
- Operations Research
- Decision Analysis
Background:
- Existing game-theoretic models analyze inspector-inspectee relationships.
- Current models often simplify the penalty structure and detection probabilities.
Purpose of the Study:
- To generalize a game-theoretic model of inspector-inspectee interactions.
- To incorporate a flexible relationship between penalty severity and the value of undetected cheating.
- To explore how inspector resources influence optimal strategies.
Main Methods:
- Game-theoretic modeling
- Mathematical analysis of strategic interactions
- Comparative statics to analyze parameter effects
Main Results:
- The model's solution structure varies based on the inspector's ability to detect cheating.
- Optimal strategies for both inspector and inspectee are contingent on penalty-value relationships.
- Resource sufficiency for the inspector is a critical determinant of game outcomes.
Conclusions:
- The generalized model provides a more nuanced understanding of compliance and enforcement dynamics.
- Inspector resource allocation significantly impacts the effectiveness of deterrence strategies.
- The findings have implications for designing optimal inspection and penalty regimes.
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