Network security and contagion
We develop a theoretical model of security investments in a network of interconnected agents. Network connections introduce the possibility of cascading failures due to an exogenous or endogenous attack depending on the profile of security investments by the agents. We provide a tractable decomposit...
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| Format: | Article |
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Elsevier BV
2018
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| Online Access: | http://hdl.handle.net/1721.1/119662 https://orcid.org/0000-0003-0908-7491 https://orcid.org/0000-0003-4033-9490 https://orcid.org/0000-0002-1827-1285 |
| _version_ | 1811090759075495936 |
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| author | Acemoglu, K. Daron Malekian, Azarakhsh Koksal, Asuman E. |
| author2 | Massachusetts Institute of Technology. Department of Economics |
| author_facet | Massachusetts Institute of Technology. Department of Economics Acemoglu, K. Daron Malekian, Azarakhsh Koksal, Asuman E. |
| author_sort | Acemoglu, K. Daron |
| collection | MIT |
| description | We develop a theoretical model of security investments in a network of interconnected agents. Network connections introduce the possibility of cascading failures due to an exogenous or endogenous attack depending on the profile of security investments by the agents. We provide a tractable decomposition of individual payoffs into an own effect and an externality, which also enables us to characterize individual investment incentives recursively (by considering the network with one agent removed at a time). Using this decomposition, we provide characterization of equilibrium and socially optimal investment levels as a function of the structure of the network, highlighting the role of a new set of network centrality measures in shaping the levels of equilibrium and optimal investments. When the attack location is endogenized (by assuming that the attacker chooses a probability distribution over the location of the attack in order to maximize damage), similar forces still operate, but now because greater investment by an agent shifts the attack to other parts of the network, the equilibrium may involve too much investment relative to the social optimum. |
| first_indexed | 2024-09-23T14:51:30Z |
| format | Article |
| id | mit-1721.1/119662 |
| institution | Massachusetts Institute of Technology |
| last_indexed | 2024-09-23T14:51:30Z |
| publishDate | 2018 |
| publisher | Elsevier BV |
| record_format | dspace |
| spelling | mit-1721.1/1196622022-10-01T22:59:30Z Network security and contagion Acemoglu, K. Daron Malekian, Azarakhsh Koksal, Asuman E. Massachusetts Institute of Technology. Department of Economics Massachusetts Institute of Technology. Department of Electrical Engineering and Computer Science Massachusetts Institute of Technology. Laboratory for Information and Decision Systems Acemoglu, K. Daron Malekian, Azarakhsh Koksal, Asuman E. We develop a theoretical model of security investments in a network of interconnected agents. Network connections introduce the possibility of cascading failures due to an exogenous or endogenous attack depending on the profile of security investments by the agents. We provide a tractable decomposition of individual payoffs into an own effect and an externality, which also enables us to characterize individual investment incentives recursively (by considering the network with one agent removed at a time). Using this decomposition, we provide characterization of equilibrium and socially optimal investment levels as a function of the structure of the network, highlighting the role of a new set of network centrality measures in shaping the levels of equilibrium and optimal investments. When the attack location is endogenized (by assuming that the attacker chooses a probability distribution over the location of the attack in order to maximize damage), similar forces still operate, but now because greater investment by an agent shifts the attack to other parts of the network, the equilibrium may involve too much investment relative to the social optimum. 2018-12-17T17:51:23Z 2018-12-17T17:51:23Z 2016-11 2018-12-04T13:33:02Z Article http://purl.org/eprint/type/JournalArticle 00220531 http://hdl.handle.net/1721.1/119662 Acemoglu, Daron, Azarakhsh Malekian, and Asu Ozdaglar. “Network Security and Contagion.” Journal of Economic Theory 166 (November 2016): 536–585. https://orcid.org/0000-0003-0908-7491 https://orcid.org/0000-0003-4033-9490 https://orcid.org/0000-0002-1827-1285 http://dx.doi.org/10.1016/J.JET.2016.09.009 Journal of Economic Theory Creative Commons Attribution-Noncommercial-Share Alike http://creativecommons.org/licenses/by-nc-sa/4.0/ application/pdf Elsevier BV NBER |
| spellingShingle | Acemoglu, K. Daron Malekian, Azarakhsh Koksal, Asuman E. Network security and contagion |
| title | Network security and contagion |
| title_full | Network security and contagion |
| title_fullStr | Network security and contagion |
| title_full_unstemmed | Network security and contagion |
| title_short | Network security and contagion |
| title_sort | network security and contagion |
| url | http://hdl.handle.net/1721.1/119662 https://orcid.org/0000-0003-0908-7491 https://orcid.org/0000-0003-4033-9490 https://orcid.org/0000-0002-1827-1285 |
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