Constant risk aversion in stochastic contests with exponential completion times

This article analyzes a class of stochastic contests among multiple players under risk‐averse exponential utility. In these contests, players compete over the completion of a task by simultaneously deciding on their investment, which determines how fast they complete the task. The completion time of the task for each player is assumed to be an exponentially distributed random variable with rate linear in the player's investment and the completion times of different players are assumed to be stochastically independent. The player that completes the task first earns a prize whereas the remaining players earn nothing. The article establishes a one‐to‐one correspondence between the Nash equilibrium of this contest with respect to risk‐averse exponential utilities and the nonnegative solution of a nonlinear equation. Using the properties of the latter, it proves the existence and the uniqueness of the Nash equilibrium, and provides an efficient method to compute it. It exploits the resulting representation of the equilibrium investments to determine the effects of risk aversion and the differences between the outcome of the Nash equilibrium and that of a centralized version.© 2016 Wiley Periodicals, Inc. Naval Research Logistics 66:4–14, 2019     

Technical note – operational statistics: Properties and the risk‐averse case

Consider a repeated newsvendor problem for managing the inventory of perishable products. When the parameter of the demand distribution is unknown, it has been shown that the traditional separated estimation and optimization (SEO) approach could lead to suboptimality. To address this issue, an integrated approach called operational statistics (OS) was developed by Chu et al., Oper Res Lett 36 (2008) 110–116. In this note, we first study the properties of this approach and compare its performance with that of the traditional SEO approach. It is shown that OS is consistent and superior to SEO. The benefit of using OS is larger when the demand variability is higher. We then generalize OS to the risk‐averse case under the conditional value‐at‐risk (CVaR) criterion. To model risk from both demand sampling and future demand uncertainty, we introduce a new criterion, called the total CVaR, and find the optimal OS under this new criterion. © 2015 Wiley Periodicals, Inc. Naval Research Logistics 62: 206–214, 2015     

British operations among the people and civilian risk

ABSTRACT

Debates on military intervention and small wars often include the claim that soldiers should operate among civilians in order to avoid civilian casualties and to protect civilians against third-party violence. This article, by contrast, points at negative unintended consequences of military operations taking place in close proximity to local populations: it argues that also risk-tolerant militaries cause civilian casualties and that their presence triggers third-party violence against civilians. The British military, in particular the British Army, exported risk-tolerant practices from Northern Ireland to the Balkans, with sporadic success. But in southern Iraq and in Helmand, British ground operations harmed civilians. The findings suggest that the chances for protection are better in operations where levels of violence are relatively low than in counterinsurgency where troops face ruthless and well-endowed enemies operating among civilians.     

The loss‐averse newsvendor problem with supply options

In this article, we consider a loss‐averse newsvendor with stochastic demand. The newsvendor might procure options when demand is unknown, and decide how many options to execute only after demand is revealed. If the newsvendor reserves too many options, he would incur high reservation costs. Yet reserving too few could result in lost sales. So the newsvendor faces a trade‐off between reservation costs and losing sales. When there are multiple options available, the newsvendor has to consider how many units of each to reserve by studying the trade‐off between flexibility and costs. We show how the newsvendor's loss aversion behavior affects his ordering decision, and propose an efficient algorithm to compute his optimal solution in the general case with n options. We also present examples showing how the newsvendor's ordering strategy changes as loss aversion rises. © 2014 Wiley Periodicals, Inc. 62:46–59, 2015     

Modeling and analysis of vessel casualties resulting from tanker traffic through narrow waterways

In this paper, we present a physics-based stochastic model to investigate vessel casualties resulting from tanker traffic through a narrow waterway. A state-space model is developed to represent the waterway and the location of vessels at a given time. We first determine the distribution of surface current at a given location of the waterway depending on channel geometry, bottom topography, boundary conditions, and the distribution of wind. Then we determine the distribution of the angular drift for a given vessel travelling at a given location of a waterway. Finally, we incorporate the drift probabilities and random arrival of vessels into a Markov chain model. By analyzing the time-dependent and the steady-state probabilities of the Markov chain, we obtain risk measures such as the probability of casualty at a given location and also the expected number of casualties for a given number of vessels arriving per unit time. Analysis of the Markovian model also yields an analytical result that shows that the expected number of casualties is proportional to square of the tanker arrival rate. We present our methodology on an experimental model of a hypothetical narrow waterway. © 1999 John Wiley & Sons, Inc. Naval Reseach Logistics 46: 871–892, 1999     

‘A Time of War’: contextual and organisational dimensions in the construction of combat motivation in the IDF

This paper explores the construction of combat motivation in the Israel Defense Forces (IDF), arguing that although Israeli society at large is in a ‘Post Heroic’ era, the ‘Heroic Spirit’ is revealed during emergencies. A total of 1535 questionnaires were administered among combat soldiers during large-scale operations fought during national emergency and during small-scale routine operations. The results reveal differences in the construction of combat motivation typical for emergency vs. routine, as well as for reserves vs. regular units. These results indicate that the Post Heroic era is a condition that could be shifted according to cultural, organisational and individual determinants. This paper discusses the roots of these constructions and their implications on the theory of combat motivation and combat experience.     

Shots per casualty: an indicator of combat efficiency for the first Australian task force in South Vietnam

ABSTRACT

In combat, the ratio of shots fired per casualty inflicted can provide a measure of the combat effectiveness of a force. The shots per casualty ratio achieved by the 1st Australian Task Force in Vietnam is shown to change according to factors including marksmanship, tactics and combat type. While, over the course of the campaign, 1ATF fired an increasing number of shots to achieve a casualty, this is explained by improvements in the quality of Viet Cong and People’s Army small arms. Australian Task Force and US Army shots per casualty ratios are briefly compared..