Choosing What to Protect: Strategic Defensive Allocation Against an Unknown Attacker
Vicki M. Bier
affiliation not provided to SSRN
University of London, Royal Holloway College - Department of Economics
Yale University - Department of Economics
Journal of Public Economic Theory, Vol. 9, Issue 4, pp. 563-587, August 2007
We study a strategic model in which a defender must allocate defensive resources to a collection of locations and an attacker must choose a location to attack. In equilibrium, the defender sometimes optimally leaves a location undefended and sometimes prefers a higher vulnerability at a particular location even if a lower risk could be achieved at zero cost. The defender prefers to allocate resources in a centralized (rather than decentralized) manner, the optimal allocation of resources can be non-monotonic in the value of the attacker's outside option, and the defender prefers her defensive allocation to be public rather than secret.
Number of Pages in PDF File: 26
Date posted: December 11, 2007
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