The Role of Games in Security Design

REVIEW OF FINANCIAL STUDIES, Vol 8 No 2

Posted: 29 Aug 1998  

Abstract

We contend that security design should be approached as a problem of game design. That is, contracts should specify the procedures that govern the behavior of contract participants in determining outcomes as well as the allocations resulting from those outcomes. We characterize optimal contracts in two nested classes: all contracts (including those that depend on the state) and state-independent contracts. We demonstrate that in situations in which the dependence of contracts on the state is limited, contracts designed as games can improve the allocation of resources relative to nonstrategic allocation rules.

JEL Classification: G30

Suggested Citation

Harris, Milton and Raviv, Artur, The Role of Games in Security Design. REVIEW OF FINANCIAL STUDIES, Vol 8 No 2. Available at SSRN: https://ssrn.com/abstract=6349

Milton Harris

University of Chicago - Finance ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
(773) 702-2549 (Phone)
(773) 753-8310 (Fax)

HOME PAGE: http://faculty.chicagobooth.edu/milton.harris/

Artur Raviv (Contact Author)

Northwestern University - Kellogg School of Management ( email )

2001 Sheridan Road
Evanston, IL 60208
United States
847-491-8342 (Phone)
847-491-5719 (Fax)

Paper statistics

Abstract Views
658