Fire Code Inspection and Compliance: A Game-Theoretic Model Between Fire Inspection Agencies and Building Owners

Fire-code inspection and compliance are among the highest priorities for fire-inspection agencies to reduce the loss of life and property that can result from fire incidents. Requirements for code compliance and inspection vary throughout towns and states within the United States, and building owners who violate these codes can be penalized via fines and mandated compliance measures. To the best of our knowledge, no previous study has investigated the strategic behavior of players in a fire-code inspection process. This paper fills the gap by presenting the game-theoretic approach to modeling building owners' behaviors with respect to fire-code compliance and the inspection strategies of fire-inspection agencies. Both a decentralized model (sequential game in which the fire-inspection agency moves first) and a centralized model (simultaneous game controlled by one central decision maker) are developed to identify the best inspection strategies for the agency and the best compliance strategies for the building owner. This study provides prescriptive insights that can enable policymakers to improve fire-code compliance and inspection by identifying the conditions that motivate the players to participate positively in the inspection and compliance processes. Numerical sensitivity analyses of the equilibrium strategies and the expected losses of the players are provided, along with a comparison of the results between the decentralized and centralized models.