An Introduction to Key Themes in the Economics of Cyber Security

An Introduction to Key Themes in the Economics of Cyber Security

Neil Gandal (Tel Aviv University and CEPR, Israel)
Copyright: © 2007 |Pages: 5
DOI: 10.4018/978-1-59140-991-5.ch010
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Abstract

Software security is an important concern for vendors, consumers, and regulators since attackers who exploit vulnerabilities can cause significant damage. In this brief paper, I discuss key themes in the budding literature on the economics of cyber-security. My primary focus is on how economics incentives affect the major issues and themes in information security. Two important themes relevant for the economics of cyber security issues are (i) a security externality and (ii) a network effect that arises in the case of computer software. A nascent economics literature has begun to examine the interaction between vulnerability disclosure, patching, product prices and profits.

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