On the Optimal Distribution of Risk and Information Exchange in Star Networks

Terror cells and military units represent entities in different networked organizations facing a common goal: the organizational structure has to be chosen such that it allows for flexible information exchange while simultaneously providing the necessary secrecy. These kind of organizations have been studied extensively from a qualitative perspective. However, quantitative approaches are less frequent, even though they can provide guidelines for policy makers on future courses of action in either counter-terrorism and counter-insurgency or in choosing organizational designs for covert action. A theoretical framework on the optimal communication structure of homogenous covert networks based on cooperative game theory exists (Lindelauf, Borm, and Hamers 2008a). A test and extension of this framework incorporating heterogeneity of the risk interactions present is presented in (Lindelauf, Borm, and Hamers 2008b). In that paper interactions were considered that are heterogeneous with respect to the risk they present to the organization, but homogeneous with respect to the amount of information exchange they provide. In this paper the star network structure will be analyzed taking both information and secrecy heterogeneity into account. We will derive the optimal distribution of risk and information exchange over the links of this graph.