Issue: 2014/Vol.24/No.3, Pages 23-44


Kjell Hausken

Full paper (PDF)    RePEC

Cite as: K. Hausken. Choosing what to protect when attacker resources and asset valuations are uncertain. Operations Research and Decisions 2014: 24(3), 23-44. DOI 10.5277/ord140302

The situation has been modelled where the attacker’s resources are unknown to the defender. Protecting assets presupposes that the defender has some information on the attacker’s resource capabilities. An attacker targets one of two assets. The attacker’s resources and valuations of these assets are drawn probabilistically. We specify when the isoutility curves are upward sloping (the defender prefers to invest less in defense, thus leading to higher probabilities of success for attacks on both as- sets) or downward sloping (e.g. when one asset has a low value or high unit defense cost). This stands in contrast to earlier research and results from the uncertainty regarding the level of the attacker’s resources. We determine which asset the attacker targets depending on his type, unit attack costs, the contest intensity, and investment in defense. A two stage game is considered, where the defender moves first and the attacker moves second. When both assets are equivalent and are treated equivalently by both players, an interior equilibrium exists when the contest intensity is low, and a corner equilibrium with no defense exists when the contest intensity is large and the attacker holds large resources. Defense efforts are inverse U shaped in the attacker’s resources.

Keywords: assets, defense, attack, game theory, uncertainty, resources, valuations, contest success function, optimization

Received: 25 February 2014    Accepted: 10 July 2014