Interdependent network restoration games with incomplete information and bounded rationality

Abstract Communities face the challenge of finding restoration strategies in the aftermath of disasters. In particular, independent and self‐interested utility managers devise such strategies for infrastructure through a heuristic decentralized process. This paper takes a game‐theoretic approach to model the decentralized and strategic restoration decision making with application to interdependent infrastructure. Particularly, we model the decision process using simultaneous games to investigate decision makers' conflicting preferences. We employ Bayesian games to incorporate the realistic assumptions of poor interagent communication, resulting in incomplete information. Also, we account for behavioral biases such as bounded rationality, cooperative behavior or lack thereof, and equality‐driven resource allocations. We test our models using ideal, synthetic interdependent networks, and the realistic infrastructure of Shelby County, TN. Results show that cooperation leads to the best‐performing decisions even if others are not cooperative. The necessity of cooperation is even higher when there is a dominant player whose service is vital to other players. Our sensitivity results highlight the significant influence of resource availability and allocation on the performance of restoration plans. Our approach enhances the practicality of decision models for community resilience, and unravels novel policy strategies such as cooperation incentives.