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Deterrence with Imperfect Attribution

Published online by Cambridge University Press:  03 August 2020

SANDEEP BALIGA ,
ETHAN BUENO DE MESQUITA Open the ORCID record for ETHAN BUENO DE MESQUITA [Opens in a new window]  and
ALEXANDER WOLITZKY
SANDEEP BALIGA*
Affiliation:
Northwestern University
ETHAN BUENO DE MESQUITA*
Affiliation:
University of Chicago
ALEXANDER WOLITZKY*
Affiliation:
Massachusetts Institute of Technology
*
Sandeep Baliga, John L. and Helen Kellogg Professor, Kellogg School of Management, Northwestern University, baliga@kellogg.northwestern.edu.
Ethan Bueno de Mesquita, Sydney Stein Professor, Harris School, University of Chicago, bdm@uchicago.edu.
Alexander Wolitzky, Associate Professor, Department of Economics, MIT, wolitzky@mit.edu.
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Abstract

Motivated by recent developments in cyberwarfare, we study deterrence in a world where attacks cannot be perfectly attributed to attackers. In the model, each of $$ n $$ attackers may attack the defender. The defender observes a noisy signal that probabilistically attributes the attack. The defender may retaliate against one or more attackers and wants to retaliate against the guilty attacker only. We note an endogenous strategic complementarity among the attackers: if one attacker becomes more aggressive, that attacker becomes more “suspect” and the other attackers become less suspect, which leads the other attackers to become more aggressive as well. Despite this complementarity, there is a unique equilibrium. We identify types of improvements in attribution that strengthen deterrence—namely, improving attack detection independently of any effect on the identifiability of the attacker, reducing false alarms, or replacing misidentification with non-detection. However, we show that other improvements in attribution can backfire, weakening deterrence—these include detecting more attacks where the attacker is difficult to identify or pursuing too much certainty in attribution. Deterrence is improved if the defender can commit to a retaliatory strategy in advance, but the defender should not always commit to retaliate more after every signal.

Type
Research Article
Information
American Political Science Review , Volume 114 , Issue 4 , November 2020 , pp. 1155 - 1178
Copyright
© The Author(s), 2020. Published by Cambridge University Press on behalf of the American Political Science Association

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Footnotes

We have received helpful comments and feedback from Daron Acemoglu, Scott Ashworth, Wiola Dziuda, Hulya Eraslan, Drew Fudenberg, Louis Kaplow, Navin Kartik, Roger Lagunoff, Robert Powell, Konstantin Sonin, Kathy Spier, and seminar audiences at A.S.S.A. 2019, Becker-Friedman Economic Theory Conference 2018, Chicago, ECARES, Georgetown, Harvard, LSE, Political Economy in the Chicago Area (P.E.C.A.) conference, UBC, and the Wallis Conference 2018. Zhaosong Ruan provided excellent research assistance. Wolitzky thanks the Sloan Foundation and the NSF for financial support.

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