MPIDR Working Paper

Shocks in homogeneous and heterogeneous populations

Abstract

A system subject to a point process of shocks is considered. Shocks occur in accordance with a nonhomogeneous Poisson process. Different criterions of system failures are discussed in a homogeneous case. Two natural settings are analyzed. Heterogeneity is modeled by an unobserved univariate random variable (frailty). It is shown that reliability (safety) analysis for a heterogeneous case can differ dramatically from that for a homogeneous setting. A shock burn-in procedure for a heterogeneous population is described. The corresponding bounds for the failure rates are obtained.