Spatio-temporal dynamics of security investments in an interdependent risk environment

In a globalised world where risks spread through contagion, the decision of an entity to invest in securing its premises from stochastic risks no longer depends solely on its own actions but also on the actions of other interacting entities in the system. This phenomenon is commonly seen in many domains including airline, logistics and computer security and is referred to as Interdependent Security (IDS). An IDS game models this decision problem from a game-theoretic perspective and deals with the behavioural dynamics of risk-reduction investments in such settings. This paper enhances this model and investigates the spatio-temporal aspects of the IDS games. The spatio-temporal dynamics are studied using simple replicator dynamics on a variety of network structures and for various security cost tradeoffs that lead to different Nash equilibria in an IDS game. The simulation results show that the neighbourhood configuration has a greater effect on the IDS game dynamics than network structure. An in-depth empirical analysis of game dynamics is carried out on regular graphs, which leads to the articulation of necessary and sufficient conditions for dominance in IDS games under spatial constraints.