Cheap Talk Game

Has the Cyber Warfare Threat been Overstated?— A Cheap Talk Game Theoretic Analysis

ABSTRACT

In a previous study (Ma 2010), we approached the problem of asymmetry of strategic information warfare (SIW) from the perspective of costly communication governed by the handicap principle (Zahavi & Zahavi 1997). In this study, we approach another problem of SIW, i.e., the assessment of cyber warfare threats, from the perspective of costless communication, which can be formulated as a cheap talk game. We apply the classic Crawford & Sobel (C-S) (1982) cheap talk game model to answer the question of whether or not cyber warfare threats may be exaggerated. Based on the Bayesian Nash equilibrium of the C-S cheap talk game, we demonstrate that, although it is possible to reach a consensus (equilibrium) between the Agent (e.g., cyber warfare lobbyist) and the Principal (e.g., government) on the state of cyber warfare threats, the loss of the state information is hardly avoidable due to A’s bias in sending costless messages.

Published In

Volume 11, Issue 1

Journal of Information Warfare

The definitive publication for the best and latest research and analysis on information warfare, information operations, and cyber crime. Available in traditional hard copy or online.

Keywords

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The definitive publication for the best and latest research and analysis on information warfare, information operations, and cyber crime. Available in traditional hard copy or online.

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