Game theory is a powerful tool for modeling the interactions of individual decision makers, including the stakeholders in humanitarian supply chain systems. A branch of mathematics long used in economics and political science to model human interaction, game theory has also been applied to commercial supply chains to maximize value optimize cooperative efforts, and form marketing strategy ,all of which are also relevant in humanitarian operations. Game theory models decentralized decision makers as players in a game, each of whom makes decisions according to the game’s structure and his own goal. The game’s outcome represents the results of interactions between decision makers. A game theory model, or simply a ‘game’, consists of several elements. The first is a set of players, each with a set of strategies from which to choose. Each player also maintains a goal, often expressed mathematically as a utility function to optimize. The combination of strategies chosen by all players determines the outcome of the game and the consequences, or payoff, to each player according to his utility function. In a game theory model of humanitarian operations, players represent stakeholders or decision makers, such as NGOs, government agencies, donors, or beneficiaries. Examples of payoffs in this context include minimized costs, efficient delivery of services, accurate demand estimation, number of beneficiaries reached, funds raised, and the level of public awareness created
Government and military entities participation impacts many humanitarian operations. The most frequent humanitarian contexts in which governmental and non-governmental organizations interact are in cases of population displacement across borders and in settings where both NGO and military groups operates. Game theory provides tools to model the interactions between governmental and non-governmental decision makers, who may have conflicting objectives. Games are also used to model government investments in disaster defense.
Various contract structures for non-profit fundraising have also been modeled using game theory. Castaneda et al. (2008) argue for contracting with donors to stabilize an organization’s income. They model competition for donations as a three-stage dynamic game between charitable organizations and potential donors.
Game theory can also be be applied to guide decisions about investments in security and stability and allow supply chain managers to prepare for natural and man-made disruptions.
Each humanitarian response occurs within a particular political context, meaning that the motivations and actions of political actors shape the response environment. This is true whether the entity in question is a host country government, foreign government, military authority, or militant group. When a government or military organization engages in relief operations, they bring a host of resources and skills. On the other hand, political realities also mean that the safety of humanitarian personnel is a major concern in some regions. For instance, 90 aid workers were murdered in Afghanistan alone between 2003 and 2006 (Olson, 2006). Games provide a tool to model ways that objectives and actions of political entities may impact humanitarian supply chain operations. Future research could lead to models that enable humanitarian logisticians to identify potential threats and vulnerabilities and develop strategies to increase supply chain security.