Earthquake prediction as a decision-making problem

In this review we consider an interdisciplinary problem of earthquake prediction involving economics. This joint research aids in understanding the prediction problem as a whole and reveals additional requirements for seismostatistics. We formulate the problem as an optimal control problem: Possessing the possibility to declare several types of alerts, it is necessary to find an optimal strategy minimizing the total expected losses. Losses include costs both for maintaining alerts and for changing alert types; each successful prediction prevents a certain amount of losses; total expected losses are integrated over the semi-infinite time interval. The discount factor is included in the model. Algorithmic and exact solutions are indicated. This paper is based on the recent results by MOLCHAN (1990, 1991, 1992).