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Choosing What to Protect: Strategic Defensive Allocation against an Unknown Attacker

  • VICKI BIER
  • SANTIAGO OLIVEROS
  • LARRY SAMUELSON

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. Copyright 2007 Blackwell Publishing, Inc..

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File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/j.1467-9779.2007.00320.x
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Article provided by Association for Public Economic Theory in its journal Journal of Public Economic Theory.

Volume (Year): 9 (2007)
Issue (Month): 4 (08)
Pages: 563-587

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Handle: RePEc:bla:jpbect:v:9:y:2007:i:4:p:563-587
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