Cyber Technology and the Arms Race

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Title: Cyber Technology and the Arms Race
Author: Kanniainen, Vesa
Publisher: HECER, Helsinki Center of Economic Research
Date: 2018-02
Language: en
Belongs to series: HECER, Discussion Paper No. 424
ISSN: 1795-0562
Abstract: Cyber technology represents digital military capability with the purpose of causing damage to the military strength of a potential enemy. War using conventional weapons may be preceded by or combined with a strike using cyber technology. This paper introduces such technology into the theory of conflicts. The cost of war relative to the payoff from victory turns out to be crucial for the results on armament decisions. In the war game, two types of Nash equilibria both subject to warfare are possible depending on the perceived cost of war. In a symmetric war game with equal cyber capabilities and a low cost of war, hostile countries choose to invest an equal amount of resources in their militaries. A higher cost of war leads to increased armament. However, asymmetric access to cyber technology limits the international arms race with conventional weapons when the cost of war is small while it - again - intensifies the arms race when the cost of war is greater. In all cases, access to cyber technology makes wars with conventional weapons more likely. Heterogeneity in the success of cyber programs creates a first-mover advantage for a superior country in terms of a possibility for a pre-emptive strike.
Subject: military conflicts
cyber war
arms race

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