Security and insurance management in networks with heterogeneous agents

Computer users express a strong desire to prevent attacks and to reduce the losses from computer and information security breaches. However, security compromises are common and widespread and highly damaging. Next to attackers' increased sophistication, a root cause for the harm inflicted is that users often fail to optimally protect their resources or to recover gracefully from a security breach. We argue that users often underestimate the strong mutual dependence between their security strategies and the economic environment (e.g., threat model) in which these choices are made and evaluated. This misunderstanding weakens the effectiveness of users' security investments, and is compounded by heterogeneity within the user population, in some cases further reducing incentives for cooperation and coordination. We study how economic agents invest into security in five different economic environments, that are characteristic of different threat models. We consider generalized mo...

• Type: Journal
• Year: 2008
• Where: SIGECOM
• Authors: Jens Grossklags, Nicolas Christin, John Chuang
• Keywords: Computers, ECommerce, Economic Environments, Security, SIGECOM 2008