Economics of Information Security (eBook)

Contents 6
Preface 8
Acknowledgments 16
SYSTEM RELIABILITY AND FREE RIDING 17
1. Literature 18
2. Notation 18
3. Nash equilibria 19
4. Social optimum 22
5. Identical values, different costs 23
6. Increasing the number of agents 23
7. Fines and liability 24
8. Sequential moves 27
9. Adversaries 29
10. Sum of efforts and weakest link 30
11. Future work 30
References 31
PRICING SECURITY 32
1. Security as an externality 33
2. Existing measures 37
3. Defining the good 40
4. Allocating property rights 43
5. Conclusions 47
References 48
CRYPTOGRAPHY AND COMPETITION POLICY – ISSUES WITH ‘TRUSTED COMPUTING’ 50
1. Trusted Computing 52
2. Value to corporate and government users 55
3. Value to content owners 57
4. Value to hardware vendors 58
5. Value to software vendors 59
6. Conclusion and Scope for Future Work 63
References 65
HOW MUCH IS STRONGER DRM WORTH? 68
References 72
TRUSTED COMPUTING, PEER-TO-PEER DISTRIBUTION, AND THE ECONOMICS OF PIRATED ENTERTAINMENT 73
1. Protecting Content 76
2. Attacking Peer-to-Peer Distribution 78
3. Defending Peer-to-Peer Distribution 80
4. Conclusion 81
Acknowledgments 81
References 82
ECONOMICS OF IT SECURITY MANAGEMENT 84
1. An economics perspective to IT security management 86
2. Assessing the total cost of security breaches 87
3. Assessing the Value of Security Controls 89
4. Effective level of investment 91
5. Other economics-based IT security studies 93
6. Conclusions and Future Research Directions 94
References 95
EVALUATING DAMAGES CAUSED BY INFORMATION SYSTEMS SECURITY INCIDENTS 97
1. Cost of Information Security Incidents 97
2. Threat-Agent Classification 100
3. Threat Agent 103
4. Techniques 103
5. Risk Management System 104
References 105
THE ECONOMIC CONSEQUENCES OF SHARING SECURITY INFORMATION 107
1. Introduction 107
2. Economic Modelling 111
3. Results 112
4. Conclusion 114
References 115
THE ECONOMICS OF INFORMATION SECURITY INVESTMENT 117
1. The Model 119
2. How Vulnerability Affects the Optimal Level of Investment in information security 125
3. Concluding Comments 133
Acknowledgements 135
References 135
Appendix 138
WHAT PRICE PRIVACY? 140
1. The Meanings of Privacy 141
2. Privacy People Pay For 142
3. The Irrational Privacy Consumer: Selling your virtual self for a hamburger 143
4. Analysis 146
5. Default States 147
6. Why Identity Theft is Not About Identity or Theft 148
7. Infrastructure Cost 151
8. Conclusion 152
References 153
WHY WE CAN’T BE BOTHERED TO READ PRIVACY POLICIES 154
1. Related Work 155
2. Privacy as a Lemons Market 156
3. Privacy Signals 156
4. Testing in the Lemons Market 158
5. Conclusions and Future Directions 161
Acknowledgements 163
References 163
IMPROVING INFORMATION FLOW IN THE INFORMATION SECURITY MARKET 165
1. U. S. Defense Efforts to bring security information to the marketplace Early Years 166
2. Globalization 171
3. Conclusions and future directions 172
References 173
PRIVACY ATTITUDES AND PRIVACY BEHAVIOR 174
1. Personal Information Security and Privacy: Attitudes versus Behavior 175
2. Exploring the Dichotomy 177
3. Factors Affecting the Rational Decision Process 179
4. An Experimental Design 184
References 185
PRIVACY AND SECURITY OF PERSONAL INFORMATION 188
1. On-line and Off-line Identities 189
2. The Economics of On-line Identities 190
3. The Economics of Off-line Identities 192
4. Economics and Technology of Privacy 193
References 194
PRIVACY, ECONOMICS, AND PRICE DISCRIMINATION ON THE INTERNET 196
1. The important role and prevalence of price discrimination 202
2. Versioning and damaged goods 207
3. The convergence of capitalism and communism 208
4. Fairness, behavioral economics, and railroads 209
5. 19th century railroad pricing revolution 210
6. 19th century railroad pricing counterrevolution 212
7. Transportation regulation and deregulation and general observations on pricing 214
8. Overt or covert price discrimination? 216
9. The many ways to skin a cat, or how to hide price discrimination 216
10. Conclusions 217
References 218
WE WANT SECURITY BUT WE HATE IT 221
1. Security and Society 224
2. Surveillance at the supermarket 224
3. Security as control or community infrastructure? 226
4. Towards ‘Surveillance Computing’ 226
5. Beyond Privacy. Think different 228
Notes 229
References 230
SECURITY AND LOCK-IN 232
1. Theoretical Framework The Role of Security in Lock-In 233
2. The US Cable Industry 240
3. The Video Gaming and Printer Cartridge Industries 244
4. Implications 247
5. Conclusion 251
Acknowledgements 252
References 252
HOW AND WHY MORE SECURE TECHNOLOGIES SUCCEED IN LEGACY MARKETS 254
1. Background 255
2. Analysis 255
3. Secure File Transfer 257
4. Conclusion 260
Acknowledgements 261
References 261
COGNITIVE HACKING 262
1. Background 262
2. Examples of Cognitive Hacking 268
3. Value of Information – Information Theoretic and Economic Models 277
4. Cognitive Hacking Countermeasures 280
5. Future Work 286
6. Summary and Conclusions 286
Acknowledgments 287
References 287
EVALUATING SECURITY SYSTEMS: A FIVE- STEP PROCESS 295
Index 300
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