This program sets up a multi-person game in which each
person chooses whether or not to make an investment in security,
e.g. a new airline
luggage screening device. Such investment is costly, but it benefits
all participants. Any one person's failure to invest may cause a system
failure (e.g. terrorist attack) according to specified probabilities.
The default parameter settings implement a coordination game in which each person would only
want to invest if enough others also invest.
This program can be used to introduce the notion of negative
externalities and coordination problems that may result in the system getting stuck in
a Pareto-inferior Nash equilibrium.
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The airline-luggage motivation is based on the idea that it only takes
one security leak in the system to cause damage to others.
It may not be worthwhile for each person to invest in
security if others are not expected to invest, since local protection is
not effective if leaks regularly occur at other nodes as a result of others' decisions.
Vecon Lab - June 6, 2023