Role of signaling in information warfare

We model an information warfare game played between defenders, who try to protect their systems in the most efficient way, and malicious attackers. We focus on the role of the informational structure of the game and especially the question whether and how signaling their systems’ characteristics affects defenders’ welfare. We find that the effect of a given security solution is stronger when attackers are informed about targets’ characteristics. This is due to the fact that attackers rationally put more effort into attacking less protected targets. Consequently, we find that systems with better levels of protection have stronger incentives to signal their security characteristics than poorly protected systems. Signaling also reduces the equilibrium social loss from attacks. These results have important implications for security practices and policies.