Newman M E J, Girvan Michelle, Farmer J Doyne
Santa Fe Institute, 1399 Hyde Park Road, Santa Fe, New Mexico 87501, USA.
Phys Rev Lett. 2002 Jul 8;89(2):028301. doi: 10.1103/PhysRevLett.89.028301. Epub 2002 Jun 21.
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 catastrophically large events is dramatically lowered, giving the system more robustness.
