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The interdependent security problem in the defense industrial base: An agent-based model on a social network

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  • Hare, Forrest
  • Goldstein, Jonathan

Abstract

This paper extends the Kunreuther and Heal game-theoretic model of the interdependent security problem by applying the model to an empirically based network environment. The scale-free network is derived from the contract-based organization of the defense industry. Theft of knowledge in this industry could have an impact on both economic and national security. However, imperfect information in the IT security market and the interdependent nature of the investment decision create the potential for underinvestment or overinvestment. An agent-based modeling technique demonstrates that social network topology may influence policy measures designed to induce tipping and cascading in cyber security investments.

Suggested Citation

  • Hare, Forrest & Goldstein, Jonathan, 2010. "The interdependent security problem in the defense industrial base: An agent-based model on a social network," International Journal of Critical Infrastructure Protection, Elsevier, vol. 3(3), pages 128-139.
    • Handle: RePEc:eee:ijocip:v:3:y:2010:i:3:p:128-139
    DOI: 10.1016/j.ijcip.2010.07.001
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    References listed on IDEAS

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    1. Geoffrey Heal & Howard Kunreuther, 2005. "IDS Models of Airline Security," Journal of Conflict Resolution, Peace Science Society (International), vol. 49(2), pages 201-217, April.
    2. R. H. Coase, 2013. "The Problem of Social Cost," Journal of Law and Economics, University of Chicago Press, vol. 56(4), pages 837-877.
    3. Hausken, Kjell, 2006. "Income, interdependence, and substitution effects affecting incentives for security investment," Journal of Accounting and Public Policy, Elsevier, vol. 25(6), pages 629-665.
    4. Dunia López-Pintado & Duncan J. Watts, 2008. "Social Influence, Binary Decisions and Collective Dynamics," Rationality and Society, , vol. 20(4), pages 399-443, November.
    5. Geoffrey Heal & Howard Kunreuther, 2007. "Modeling Interdependent Risks," Risk Analysis, John Wiley & Sons, vol. 27(3), pages 621-634, June.
    6. Kunreuther, Howard & Heal, Geoffrey, 2003. "Interdependent Security," Journal of Risk and Uncertainty, Springer, vol. 26(2-3), pages 231-249, March-May.
    7. Yossi Sheffi, 2005. "The Resilient Enterprise: Overcoming Vulnerability for Competitive Advantage," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262693496, April.
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    Cited by:

    1. Singh, Abhishek Narain & Gupta, M.P. & Ojha, Amitabh, 2014. "Identifying critical infrastructure sectors and their dependencies: An Indian scenario," International Journal of Critical Infrastructure Protection, Elsevier, vol. 7(2), pages 71-85.
    2. Xing Gao & Weijun Zhong & Shue Mei, 2015. "Security investment and information sharing under an alternative security breach probability function," Information Systems Frontiers, Springer, vol. 17(2), pages 423-438, April.
    3. Lu, Qing-Chang & Xu, Peng-Cheng & Zhao, Xiangmo & Zhang, Lei & Li, Xiaoling & Cui, Xin, 2022. "Measuring network interdependency between dependent networks: A supply-demand-based approach," Reliability Engineering and System Safety, Elsevier, vol. 225(C).

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