Adversarial Risk Analysis: The Somali Pirates case

Some of the current world’s biggest problems revolve around security issues. This has raised recent interest in resource allocation models to manage security threats, from terrorism to organized crime through money laundering. One of those approaches is adversarial risk analysis, which aims at dealing with decision making problems with intelligent opponents and uncertain outcomes. We show here how such framework may cope with a current important security issue in relation with piracy in the Somali coasts. Specifically, we describe how to support the owner of a ship in managing risks from piracy in that area. We illustrate how a sequential defend-attack-defend model can be used to formulate this decision problem and solve it for the ship owner. Emphasis will be put on explaining how we can model the Pirates thinking in order to anticipate their behavior and how it would lead to a predictive probability distribution, from the defender’s perspective, over what the Pirates may do.