Whether to attack growing assets and enterprises today or tomorrow

Kjell Hausken

International Journal of Business Continuity and Risk Management, 2010, vol. 1, issue 4, 339-362

Abstract: An asset possessed by a defender grows from the first to the second period and is attacked in both periods. With large growth, there is no attack in the first period. Conflict is eliminated. The attacker postpones the attack until the second period. The attacker shows restraint in the first period in order to cash in on the fruits of her restraint in the second period. When the defender's discount parameter is at least 1/8 of the attacker's discount parameter, the defender's first period investment is inverse U formed in growth and eventually decreases to zero since with more growth, he eventually has to defend against a greater attack in the second period. In the second period, both actors' investments increase in growth. The defender's discount parameter does not influence whether an attack occurs in the first period. A first period attack is prevented if the attacker's discount parameter is large, and growth is above a certain value. Also, if the product of growth and the attacker's discount parameter is above one, a first period attack is prevented if the defence inefficiency is large, or the attack inefficiency is low, or the usability of appropriation is large.

Keywords: dynamic conflict theory; two periods; dynamics; growth; discounting; defence inefficiency; attack inefficiency; appropriative usability; contest success function; time substitution; investment. (search for similar items in EconPapers)
Date: 2010
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