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Strategic cyberwarfare

Author

Listed:
  • Erik Lillethun
  • Rishi Sharma

Abstract

This paper develops a theoretical model of cyberwarfare between nations, focusing on the factors that determine the severity and outcomes of cyber conflicts. We introduce a two‐country model where nations invest in offensive or defensive cyber capabilities across networked systems. We show that resource expenditure intensifies when players' effective values are similar, which can help explain the rise of cyberwarfare. We explore the implications of network structures, showing how larger attack surfaces worsen outcomes for defenders. Additionally, we investigate the impact of private cyber defence provision, and find that centralized policies may either improve or exacerbate cyber conflict.

Suggested Citation

  • Erik Lillethun & Rishi Sharma, 2026. "Strategic cyberwarfare," Economic Inquiry, Western Economic Association International, vol. 64(1), pages 221-244, January.
    • Handle: RePEc:bla:ecinqu:v:64:y:2026:i:1:p:221-244
    DOI: 10.1111/ecin.70027
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • F5 - International Economics - - International Relations, National Security, and International Political Economy

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