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Public and Private Wildfire Risk Management: Spatial and Strategic Interaction

Public and Private Wildfire Risk Management: Spatial and Strategic Interaction. Gwen Busby, H.J. Albers, Claire Montgomery May 8, 2007. Game Theory and Strategic Behavior. Game consists of: Players Strategies Payoffs. Probability Values Survive Fire. Fuel treatment effort.

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Public and Private Wildfire Risk Management: Spatial and Strategic Interaction

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  1. Public and Private Wildfire Risk Management:Spatial and Strategic Interaction Gwen Busby, H.J. Albers, Claire Montgomery May 8, 2007

  2. Game Theory and Strategic Behavior Game consists of: • Players • Strategies • Payoffs Probability Values Survive Fire Fuel treatment effort

  3. The Landscape WUI Public and Private Ownership Outside WUI Only Public Ownership

  4. Public’s Problem Private’s Problem Social Planner’s Problem

  5. How does each player respond to what the other is doing? Private’s Response Function Public’s Response Function Private effort (ep) Private effort (ep) kink y-intercept x-intercept kink Public effort (eg,w) Public effort (eg,w)

  6. Extreme Free Riding Equilibria Private’s Response Function Public’s Response Function Private effort (ep) Private effort (ep) Public effort (eg,w) Public effort (eg,w)

  7. Shared Effort Equilibrium Private’s Response Function Public’s Response Function Private effort (ep) Public effort (eg,w)

  8. Equilibrium effort levels for: Ag,o =1; Ag,w=1; Ap=1;φ=0.5; v=2; c=0.1.

  9. Equilibrium effort levels for: Ag,o =4; Ag,w=1; Ap=1; φ=0.8; v=2; c=0.1.

  10. Equilibrium effort levels for: Ag,o =1; Ag,w=1; Ap=1;B=2; v=2; c=0.1.

  11. Policy 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

  12. Main 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.

  13. Objectives of Future Research • Spatially explicit landscape with public and private ownership. • Government regulation, liability rules, and private insurance • Best policies for typical ownership patterns

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