Enigma

This paper explores the role of information in warfare. I focus on the Battle of the Atlantic during World War II, where Allied merchant ships faced Nazi U-boats. Combining novel data on Enigma-encrypted messages with different sources of quasi-exogenous variation, I find that information about Nazi U-boat positions significantly reduced their success in attacking Allied ships. In contrast, U-boats’ own survival declined only marginally. Allied strikes were selective, prioritizing high-capacity U-boats, and increased toward the end of the war. This is consistent with a mechanism in which the Allies strategically forewent benefits to safeguard the secrecy of information access. Counterfactual simulations suggest that Enigma intelligence prevented 40 percent of potential shipping losses.