Securing a border under asymmetric information

We study a stochastic interdiction model of Morton et al. IIE Transactions, 39 (2007):3-14 that locates radiation sensors at border crossings to detect and prevent the smuggling of nuclear material. In this model, an interdictor places sensors at customs checkpoints to minimize a potential smuggler's maximum probability of crossing a border undetected. We focus on a model variant in which the interdictor has different, and likely more accurate, perceptions of the system's parameters than the smuggler does. We introduce a model that is tighter and uses fewer constraints than that of Morton et al. We also develop a class of valid inequalities along with a corresponding separation procedure that can be used within a cutting-plane approach to reduce computational effort. Computational results demonstrate the effectiveness of our approach.Copyright (c) 2014 Wiley Periodicals, Inc. Naval Research Logistics 61: 91-100, 2014