September 1, 2013
In this paper, we investigate the dynamics between a defender and an attacker when considering the issue of technology in a multiperiod sequential game with uncertainty. In this setting, defenders can improve their chances of defending against an attack by investing in technology, whereas attackers can forego attacking by using their time to accumulate knowledge, resources, or technology to improve their future chances of success. Because dynamic games of this type are generally difficult to solve, we examine a simple modified dynamic programming algorithm that could be used to computationally analyze problems in this framework. We study how parameters behave in this model in order to understand how they affect the optimal behavior of each player and later compare simple heuristics for each player to the optimal solution to this model. We show that there could be gross inefficiencies when the optimal timing of technology adoption and accumulation is not considered.