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Cyber Technology and Arms Race

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  • Vesa Kanniainen

Abstract

Cyber technology represents digital military capability with the purpose of causing damage to the military strength and the social infrastructure of a potential enemy. War using conventional weapons may be preceded by or combined with a war using cyber technology. This paper introduces such technology into the theory of conflicts, suggesting the striking proposal that the expected return on cyber investment is convex. It is shown that an asymmetric successful cyber program results in an option for a pre-emptive cyber attack. These features of the model make the cyber technology a first-ranked military investment. The optimal scale of a cyber program of a country expected to have access to a superior cyber capability is derived. It is shown that the asymmetric cyber capability reduces the international arms race but nevertheless raises the likelihood of a war reducing the deterrence.

Suggested Citation

  • Vesa Kanniainen, 2017. "Cyber Technology and Arms Race," CESifo Working Paper Series 6365, CESifo.
    • Handle: RePEc:ces:ceswps:_6365
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    References listed on IDEAS

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    1. Konrad, Kai A., 2009. "Strategy and Dynamics in Contests," OUP Catalogue, Oxford University Press, number 9780199549603.
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    More about this item

    Keywords

    military conflicts; cyber war; arms race;
    All these keywords.

    JEL classification:

    • H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management
    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War

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