Horizontal Coordination in Disaster Relief Operations: Incentives and Mechanisms

Horizontal Coordination in Disaster Relief Operations: Incentives and Mechanisms Horizontal Coordination in Disaster Relief Operations: Incentives and Mechanisms 3. Executive Summary An effective alternative to boost resilience of disaster relief systems and to elevate operational performance is horizontal coordination, i.e., the operational alignment of a group of entities, providing similar services, in a way that enhances efficiency and/or effectiveness. Using game-theoretic models to predict the possible outcomes of a given situation, this research will design practical mechanisms for horizontal coordination, in static and dynamic fashions, among humanitarian organizations (HOs) involved in a disaster response. This study consists of three stages. Stage 1 empirically identifies the actual utility of HOs, and illuminates how it is affected by operating conditions, source and magnitude of uncertainties, and inter- and intra-organizational characters unique to HOs. It shows how various sources of uncertainty including demand, supply, budget, and media exposure, exclusively and jointly, influence HOs coordination decisions within centralized and decentralized topologies. Stage 2 analyzes a decision-making model that draws on the findings in Stage 1. In stage 2, using single-stage non-cooperative game theoretic models, I will design mechanisms for horizontal coordination, tailored to a wide range of settings, and extensively discuss the efficiency of these mechanisms for different coordination topologies. I will measure the social welfare of equilibrium outcomes to identify settings in which each regime is preferred. Finally, Stage 3 pursues in-depth analysis of the preferred regime in each setting accounting for time dynamics and feedback via non-cooperative differential games. Theories of firms coordination can be divided into two types: related to coordination decisions, and to coordination mechanisms. Developing mechanisms without an analysis of the drivers of coordination decision is not credible. The narrow literature of humanitarian logistics does not address the first question; it relies on cost-benefit tradeoff, borrowed from commercial settings, when proposing coordination mechanisms. Therefore, a critical challenge is insufficient knowledge about parties utility function, operational context, and contextual details. The unique approach proposed in this study overcomes this issue through a rigorous empirical study in Stage 1. Results of this study will unveil HOs utility function for the first time, and create new theories illustrating whether, and to what degree, HO utility is affected by the source and magnitude of uncertainty, and when it deals with multiple sources of uncertainty concurrently. The results are expected to challenge the prevalent wisdom obtained from decades of research on demand/supply uncertainty models that they are essentially two-side of the same coin, and decision tools developed from the study of one apply to the other. These results will also offer a significant contribution to coordination theory; in contrast to the existing literature, motivated by (and limited to) traditional business logistics, this study takes the key elements of relief operations into account, and cultivates coordination mechanisms among resource dependent firms with peculiar set of incentives and complex operating conditions. Hence, the results of this study can be generalized to many situations beyond the humanitarian contexts (e.g., coordination between governmental entities facing uncertainties). This project is designed based on close collaboration with practitioners (i.e., government entities, and HOs). As shown in Section 10, we will constantly verify our findings with practitioners. This continuous relationship helps us to design and implement a pilot study to test the final results of this project to assure its practicality. The first two stages of this project will conclude within 24 months, with an estimated cost of $361,911. The third optional stage will be completed within 12 months with an estimated cost of $220,615. Detailed budgeting is explained in Attachment 3.