Role of Computer Simulation in Mitigating Natural Catastrophic Risks

In recent decades, the frequency and severity of natural hazards have substantially escalated as a result of accelerating deterioration of natural environmental conditions, increasing concentration of population in high-risk zones, and greater susceptibility of modern industrial societies to catastrophes. The main goal of this paper is to address the theory and practice for developing simulation models for mitigation of the negative financial effects associated with extreme natural events. Though current catastrophe simulation models have been lately dynamic in predicting the effect of natural hazards; they cannot account for the socioeconomic and stakeholder dimension of natural catastrophic risk. Most previous research to study and mitigate the financial impact of such risks has only analyzed the problem from unilateral aggregated simulation perspective. Moreover, the employment of micro-level representation in simulation models for disaster planning is very rare and is only limited to work that: (1) did not cover the societal aspect of the problem represented by associated stakeholders; (2) did not provide a mechanism to measure the costs associated with these stakeholders as a result of interdependencies, constraints, and uncertainties; and (3) did not attempt to study financial mitigation of natural hazards from an integrated societal perspective that optimize position of interrelated stakeholders. Accordingly, it is advised to study and model the extremely complex and dynamic environments governing natural catastrophic risk using a micro level multi agent stochastic simulation approach. This would provide an express shift from previous simulation models as well as efficient and effective decentralized communication of information, and consequently; a detailed and more accurate simulation environment.