How Jeremy Bentham Would Defend Against Coordinated Attacks

44 Pages Posted: 14 Sep 2015

See all articles by Ole Jann

Ole Jann

University of Oxford - Nuffield Department of Medicine; University of Oxford - Department of Economics

Christoph Schottmüller

University of Cologne; Tilburg Law and Economics Center (TILEC)

Multiple version iconThere are 2 versions of this paper

Date Written: August 12, 2015

Abstract

How can a single player defend against the threat of a coordinated attack by a group? For example, how can a central bank defend a currency peg against speculators, a government against a revolution or a prison warden against a breakout? Bentham (1787) proposed an innovative prison concept based on information asymmetries – the “panopticon” – as an answer to this question. We consider different information structures in a stylized model of a prison, in which a warden chooses a costly guard level with the goal of avoiding breakouts. Successful breakouts require coordination among prisoners. We show that the information structure corresponding to the panopticon often performs best, especially if there are many prisoners.

Keywords: panopticon, coordination games, global games, transparency

JEL Classification: D23, D74, D82, E58, Z13, F31

Suggested Citation

Jann, Ole and Schottmüller, Christoph and Schottmüller, Christoph, How Jeremy Bentham Would Defend Against Coordinated Attacks (August 12, 2015). TILEC Discussion Paper No. 2015-018, Available at SSRN: https://ssrn.com/abstract=2659026 or http://dx.doi.org/10.2139/ssrn.2659026

Ole Jann (Contact Author)

University of Oxford - Nuffield Department of Medicine ( email )

New Road
Oxford, OX1 1NF
United Kingdom

University of Oxford - Department of Economics ( email )

10 Manor Rd
Oxford, Oxfordshire OX1 3UQ
United Kingdom

Christoph Schottmüller

Tilburg Law and Economics Center (TILEC) ( email )

Warandelaan 2
Tilburg, 5000 LE
Netherlands

University of Cologne ( email )

Albertus-Magnus-Platz
Cologne, 50923
Germany

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