Truck and Barter

Arms Races

According to wikpedia an arms race is:

...a competition between two or more countries for military supremacy. Each party competes to produce superior numbers of weapons or superior military technology in a technological escalation.

The term "arms race" is used generically to describe any competition where there is no absolute goal, only the relative goal of staying ahead of the other competitors. Evolutionary arms races are common occurrences, e.g. predators evolving more effective means to catch prey while their prey evolves more effective means of evasion

What's interesting is the many economic relationships that are typified by arms races. Still more interesting is trying to understand the notion of equilibrium in the context of these on going battles, and asking the question is it truly a stable equilibrium, or can technological innovation move you to another equilibrium?

Take for instance code making and code breaking. In Simon Singh's excellent book, The Code Book, he describes the arms race between code makers and code breakers. But eventually code makers "solved" the problem of the keys:

One problem with symmetric key cryptography is that you must have a secure method for exchanging keys between participants. In World War II, the capture of an intact German submarine provided a codebook which let the Allies decrypt German naval messages.

The solution to key distribution came in 1975, when Whitfield Diffie and Martin Hellman proposed public key cryptography. Diffie and Hellman’s scheme, later known as asymmetric key cryptography, permits the use of two keys, one of which can be openly published and still permit secure, encrypted communications. In their scheme, anyone can know the public key without revealing the private key, as the two are mathematically related, but in a way that is very difficult to calculate (based on computing the discrete logarithm of large numbers).

While this doesn't mean that only those whom you want to read the encrypted message will be able to read it, it does require the appropriate key. While someone could guess the key this makes the guessing very hard, and doesn't provide any shortcuts. So brute force is the only methode for cracking the RSA. Will number theorists figure out a short cut for finding the prime number used in the encryption and therefore restore the balance between code makers and code breakers?

Some other examples of arms races:

Google and the people who game its ranking technology, from Delong:

When Microsoft's new search engine (which is, I am told, already crawling the web at high speed) debuts, it will be very good: it will be very good because everyone trying to artificially inflate their search relevance is targeting Google, and Google has to dissipate a huge amount of resources trying (semi-successfully) to undo the efforts of those who are gaming it, while nobody is targeting Microsoft.

Should Microsoft's new search engine garner significant market share, however, its quality will start to degrade as the game-players start paying attention to it.

Posted at June 9, 2004 11:23 AM | TrackBack