The Winding, Bumpy Road from Espionage to Intelligence

Entry and espionage with noisy signals

We analyze industrial espionage in the context of entry deterrence. We consider a monopoly incumbent, who may expand capacity to deter entry, and a potential entrant who owns an inaccurate Intelligence System. The Intelligence System generates a noisy signal on incumbent's actions and the potential entrant decides whether to enter based on this signal. If the precision of the Intelligence Syste...

Cyber Espionage and Illegitimate Information Retrieval

One of the most serious threats to a modern country’s trade, industry and long-term economic development is cyber espionage and insiders. The activities are directed against high-technological industries and companies with advanced basic research. The defence and telecoms sectors are of particular interest, just as biotechnics, medical and material technology. Behind this kind of espionage ther...

Technophilic hubris and espionage styles during the Cold War.

During the Cold War the United States developed an espionage style that reflected its love affair with technology (technophilia) whereas the Soviet Union and the East Bloc continued a tradition of using humans to collect intelligence. This essay places the origins and development of these espionage styles during the Cold War in historical and social context, and assesses their strengths and wea...

Enlightened Secrets: Silk, Intelligent Travel, and Industrial Espionage in Eighteenth-Century France

Industrial Espionage with a Noisy Intelligence

We analyze industrial espionage in a model of two firms: a monopoly incumbent, M, and a potential entrant, E, who owns a noisy intelligence system (IS) of a certain precisionα . The IS generates a signal on M’s action and E decides whether or not to enter based on this signal. We show that ifα is commonly known, M is the one who benefits from a perfect IS and E who spies on M prefers a less acc...