Optimal Design, Robustness, and Risk Aversion

M. E. J. Newman, Michelle Girvan, and J. Doyne Farmer
Phys. Rev. Lett. 89, 028301 – Published 21 June 2002
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Abstract

Highly optimized tolerance is a model of optimization in engineered systems, which gives rise to power-law distributions of failure events in such systems. The archetypal example is the highly optimized forest fire model. Here we give an analytic solution for this model which explains the origin of the power laws. We also generalize the model to incorporate risk aversion, which results in truncation of the tails of the power law so that the probability of disastrously large events is dramatically lowered, giving the system more robustness.

  • Received 19 February 2002

DOI:https://doi.org/10.1103/PhysRevLett.89.028301

©2002 American Physical Society

Authors & Affiliations

M. E. J. Newman1,2, Michelle Girvan1,3, and J. Doyne Farmer1

  • 1Santa Fe Institute, 1399 Hyde Park Road, Santa Fe, New Mexico 87501
  • 2Department of Physics, University of Michigan, Ann Arbor, Michigan 48109-1120
  • 3Department of Physics, Cornell University, Ithaca, New York 14853-2501

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Vol. 89, Iss. 2 — 8 July 2002

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