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Abstract:
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Adversarial Risk Analysis (ARA) is a decision-theoretic alternative to game theory, and thus potentially applicable to corporate competition, auctions, counterterrorism, and the three-way game between an industry, a regulatory agency, and the public. In ARA, one builds a model for the strategic decision making of one's opponent(s), and then places subjective Bayesian distributions over unknown quantities (such as the opponent's utility function, resources, and personal probabilities for various outcomes). This structure enables the analyst to compartmentalize three distinct kinds of uncertainty and address each separately.
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