A Model of Fortification Using Bayesian Persuasion Jomon A. Paul and Abhra Roy Coles Research Symposium on Homeland Security, Special Issue, SIFALL22-05, October 2022
OVERVIEW
Many critical infrastructure firms may be vulnerable to imminent attacks, but they are often myopic and assess their need for fortification based on its cost and their assessment of danger. From their perspective, fortification pays off only if an attack occurs. To the extent that they serve as the economy’s backbone, their inertia can harm society in general. In this context, can the government persuade more firms to fortify? The answer is yes. The government can persuade firms to fortify against possible attacks when they might not have done so on their own by creating an informational environment. Public welfare is highest under perfect intelligence, but even under high or moderate intelligence, disclosing less information, the government can mobilize more firms to fortify.
38 | Coles Research Symposium
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