D.06.2. A Report on the Interaction of Systems Models and Models of Economics, Law and Society

The main aim of this deliverable is to provide a marker stone for the current state of law and
economics as applied to the case studies of security within SECONOMICS. This deliverable
provides a) a comprehensive summary of the current and near future legal mechanisms
for the EU and the US, identified as ket marker points earlier in the project for study. b)
the current set of economic models developed within the project that map public policy to
firm specific behaviour and c) the specific regulatory model framing for case study 2, of
its interaction with various regulatory approaches. This deliverable plays a critical role in
providing guidance on how laws interact with incentives to produce economic outcomes.
The document is broken down into sections following the DoW. In §(2.2) we provide an
overview of the current future legal states and provide some summary analysis in respect
to the EU context. In §(3.2) we provide a detailed analysis of our guiding assumptions on
investment and risk within a game theoretic model of public policy specifically designed to
capture the reactive antagonists observed in security economics. Finally, in §(4) we provide
an overview of the architecturally consistent models use to model regulation for our case
WP – D6.2 provides an overview of the research conducted by the SECONOMICS project
on the role of security in society. A particular emphasis of this document is on the mech-
anism of regulation and the underlying economic and social drivers for the development of
regulation. Attached to this deliverable are three research papers that focus on the main
requirements as set out in the description of work. However, the research papers in the
deliverable provide substantially greater depth than envisioned at the inception of the project
and cover a wide range of approaches to designing regulation, from the detailed legal spec-
ifications found in ANNEX1 through to the theory of how to design the overview of these
legal instruments in ANNEX3. In contrast ANNEX2 attempts to reconcile the high level
conceptual approaches and the more specific legal drivers in a strategic framework. This
deliverable represents a substantial step-forward in designing an evidence led approach to
modelling strategic security situations at the macro-prudential level. In this case, the models
that capture macro-prudential considerations represent both the specific design goals and
implementation of regulation.
D6.2 contains threads in the technical parts of the Annexes that illustrate how the mod-
elling approaches can be converted into working modelling tools deployed using simulation
and analytical mathematics. The main body of the text of the document attempts to mini-
mize the use of technical legal, modelling or economic language. For those interested in the
specific implementations of the models the Annexes provide a detailed overview.

A Report on the Interaction of Systems Models and Models of Economics, Law and Society