On the Provision of Public Goods on Networks: Incentives, Exit Equilibrium, and Applications to Cyber Security

Attempts to improve the state of cyber security have been on the rise over the past years. The importance of incentivizing better security decisions by users is two-fold: it not only helps users protect themselves against attacks, but it further provides positive externalities to others interacting with them, as a protected user is less likely to become compromised and used to propagate attacks against other entities. As a result, security can be viewed as a public good.
We take a game-theoretic approach to understanding users' incentives in the provision of public goods, and in particular, cyber security. We first analyze the interactions of strategic users in the provision of security as a non-excludable public good. By proposing the notion of exit equilibrium, we highlight the crucial effect of users' outside options in the design of mechanisms for incentivizing the better provision of non-excludable goods.
The main focus of the talk will be on the analysis of public good provision games on networks. We study different effort outcomes of these network games: the Nash equilibria, Pareto efficient effort profiles, and semi-cooperative equilibria. We identify necessary and sufficient conditions on the structure of the network for the existence and uniqueness of these effort profiles, and show that our results unify (and strengthen) existing results in the literature. We provide a graph-theoretical characterization of agents' efforts by linking an agent's decision to her centrality in the interaction network. Using this characterization, we separate the effects of agents' dependencies and influences (outgoing and incoming edges in the network, respectively), and uncover an alternating effect over walks of different length in the network.
We also propose the design of inter-temporal incentives in a particular type of security games, namely, security information sharing agreement. We discuss how either public or private assessments can be used in designing incentives for participants to disclose their information in these agreements.