The Adversarial Discount - AI, Signal Correlation, and the Cybersecurity Arms Race (opens in new tab)

We study a contest-theoretic model of adversarial investment in which an attacker and a defender allocate resources to AI-augmented capabilities across multiple attack surfaces. The attacker's investment operates through two channels: it amplifies offensive potency unconditionally and erodes defensive effectiveness conditionally, generating an adversarial discount that deepens endogenously with the defender's own investment. We derive a closed...