Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/155607
Authors: 
Kanniainen, Vesa
Year of Publication: 
2017
Series/Report no.: 
CESifo Working Paper 6365
Abstract: 
Cyber technology represents digital military capability with the purpose of causing damage to the military strength and the social infrastructure of a potential enemy. War using conventional weapons may be preceded by or combined with a war using cyber technology. This paper introduces such technology into the theory of conflicts, suggesting the striking proposal that the expected return on cyber investment is convex. It is shown that an asymmetric successful cyber program results in an option for a pre-emptive cyber attack. These features of the model make the cyber technology a first-ranked military investment. The optimal scale of a cyber program of a country expected to have access to a superior cyber capability is derived. It is shown that the asymmetric cyber capability reduces the international arms race but nevertheless raises the likelihood of a war reducing the deterrence.
Subjects: 
military conflicts
cyber war
arms race
JEL: 
H12
H56
Document Type: 
Working Paper

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