Analysis and Implications of the Management of Near-Miss Events: A Game Theoretic Approach

•Applicable game-theory models for analyzing near-miss-event handling are developed.•Models consider inherent motivation and aversion to reporting of the employee.•Different objective functions of the manager, who acts as a leader, are analyzed.•Simulations of random series of near-miss events are performed.•Periodic fluctuations in the likelihood of future accidents are inevitable. Near-miss safety events—unplanned incidents that reveal the potential for future adverse events—have an important yet complex role in workplace safety: If reported and handled correctly, they can contribute to the improvement of safety procedures, yet if they are mishandled, the likelihood of subsequent adverse events might increase. This research formulates and analyses game theoretic models that can serve as an applicable tool for guiding managerial strategies with regard to the handling of near-miss events. In these models, the manager decides how much to invest in incentivizing employees to report near-miss events, with the aim of achieving various objectives (e.g., minimizing costs or maintaining/reducing the likelihood of future adverse events). These models incorporate realistic features of employee behaviour (e.g., inherent motivation to report or aversion to reporting) and address a large spectrum of situations encountered in practice. We develop a single-event model as well as a multi-event model; the latter is a repeated game that captures the common scenario in which adverse events are preceded by multiple precursors. Different strategies are considered using simulations of random events. We derive practical guidelines that can enable managers to decrease the likelihood of adverse events over time—though periodic fluctuations are inevitable.