Modeling and Analysis of a Nonlinear Security Game with Mixed Armament

Overview & Synopsis

We formulate a security game in a context of mixed armament acquisition, involving a finite set of Nations in strategic relationship, with utility functions which are nonlinear and non-differentiable on the boundary of their sets of definition. Since we want to study the long-term effect of the Nations' investment in nuclear weapons, we focus on the steady-state analysis of the game. This requires us to extend the classical results from Rosen on compact-convex games, to unbounded convex games, relying on the coercivity property of the Nations' utility functions. In addition, we prove the existence and uniqueness, under mild assumptions, of an interior point Nash Equilibrium solution of the game. Simulations are performed in case of a duopoly, highlighting the efficiency loss reduction and stabilizing effect of nuclear armaments by comparison with the conventional-only setting.