Power laws, highly optimized tolerance, and generalized source coding

We introduce a family of robust design problems for complex systems in uncertain environments which are based on tradeoffs between resource allocations and losses. Optimized solutions yield the "robust, yet fragile" features of highly optimized tolerance and exhibit power law tails in the distributions of events for all but the special case of Shannon coding for data compression. In addition to data compression, we construct specific solutions for world wide web traffic and forest fires, and obtain excellent agreement with measured data.