Economics of Information Security

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The State of Economics of Information Security

The State of Economics of Information Security

The work by Granick was first presented at the Fourth Workshop on the Economics of Information Security at Harvard University. Granick shows that the current legal construction of computer crime does not provide either clear incentives to invest in security or disincentives to commit computer crime. In computer crime, the cost to the victim of the crime is determined by the victim of the crime both before and after the incident. Companies that are ill-prepared even to the point of negligence can point to all their response costs, even those created by their own processes, as caused by an intrusion. For example, a company that fails to have even a trivial firewall can point to the post-incident purchase of a firewall as a cost of intrusion, as opposed to being held negligent to the point of creating an attractive hazard. Companies that overrespond to the point of paranoia can similarly run up costs and thus the putative harm of the crime. The law arguably protects at least those organizations that are the most prepared before an event and are the most professional in response. The punishments, as currently defined, may fit neither crime nor criminal. The incentives under the law are perverse, and the market cannot reverse those incentives.
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Economics of Information Security - A Review

Economics of Information Security - A Review

optimal investment, z*(v) = ? §  two classes of security breach functions §  S1(z,v) = v/(αz + 1) β •  where α > 0, β ≥ 1 are measures of the productivity of information security (i.e., for a given (v, z), the probability of a security breach is decreasing in both α and β)

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Experience. Refereed Journal Articles/Book Chapters. Economics of Information Security

Experience. Refereed Journal Articles/Book Chapters. Economics of Information Security

[18] T. Moore and B. Edelman. ‘Measuring the Perpetrators and Funders of Typosquat- ting’. In: 14th International Conference on Financial Cryptography and Data Security (FC 2010), January 25–28, 2010, Tenerife, Spain. Lecture Notes in Computer Science (LNCS) 6054, pp. 175–191, Springer.

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How Economics and Information Security Affects Cyber Crime and What It Means in the Context of a Global Recession

How Economics and Information Security Affects Cyber Crime and What It Means in the Context of a Global Recession

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 The
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ECONOMICS OF IT SECURITY MANAGEMENT: FOUR IMPROVEMENTS TO CURRENT SECURITY PRACTICES

ECONOMICS OF IT SECURITY MANAGEMENT: FOUR IMPROVEMENTS TO CURRENT SECURITY PRACTICES

In the 2002 CSI-FBI survey of 503 respondents from organizations throughout the United States, 80% reported financial losses from security breaches but only 44% (223) of them were able to quantify them 2 . The total reported losses, as highlighted above, were $456 million and the average loss was $2.0 million per organization across all type of breaches. The highest reported losses were for theft of proprietary information, reported by 41 organizations with an average loss of $4.2 million per organization. The sabotage of data networks cost an average of $352 thousand while denial-of-service resulted in $245 thousand loss per organization [Power 2002]. The costs associated with restoring a system after a security breach and business loss during the disruption provide at best a partial picture. The true cost of a security breach is multifaceted. Information security is as a value creator that supports and enables e-business, rather than only as a cost of doing business. A secure environment for information and transaction flow can create value for the organization as well as its partners and customers [Cavusoglu et al. 2004a]. By the same token, security lapses can lead to breach of consumer confidence and trust in addition to lost business and third party liability. In a survey by Media Metrix, only 12.1% of the U.S. companies with a Web presence cite direct financial loss as a concern in a security breach, but more than 40% cite consumer trust and confidence [Pastore 2001].
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RELATIONSHIP BETWEEN INFORMATION SECURITY AWARENESS AND INFORMATION SECURITY THREAT

RELATIONSHIP BETWEEN INFORMATION SECURITY AWARENESS AND INFORMATION SECURITY THREAT

We invite unpublished novel, original, empirical and high quality research work pertaining to recent developments & practices in the areas of Computer Science & Applications; Commerce; Business; Finance; Marketing; Human Resource Management; General Management; Banking; Economics; Tourism Administration & Management; Education; Law; Library & Information Science; Defence & Strategic Studies; Electronic Science; Corporate Governance; Industrial Relations; and emerging paradigms in allied subjects like Accounting; Accounting Information Systems; Accounting Theory & Practice; Auditing; Behavioral Accounting; Behavioral Economics; Corporate Finance; Cost Accounting; Econometrics; Economic Development; Economic History; Financial Institutions & Markets; Financial Services; Fiscal Policy; Government & Non Profit Accounting; Industrial Organization; International Economics & Trade; International Finance; Macro Economics; Micro Economics; Rural Economics; Co-operation; Demography: Development Planning; Development Studies; Applied Economics; Development Economics; Business Economics; Monetary Policy; Public Policy Economics; Real Estate; Regional Economics; Political Science; Continuing Education; Labour Welfare; Philosophy; Psychology; Sociology; Tax Accounting; Advertising & Promotion Management; Management Information Systems (MIS); Business Law; Public Responsibility & Ethics; Communication; Direct Marketing; E-Commerce; Global Business; Health Care Administration; Labour Relations & Human Resource Management; Marketing Research; Marketing Theory & Applications; Non-Profit Organizations; Office Administration/Management; Operations Research/Statistics; Organizational Behavior & Theory; Organizational Development; Production/Operations; International Relations; Human Rights & Duties; Public Administration; Population Studies; Purchasing/Materials Management; Retailing; Sales/Selling; Services; Small Business Entrepreneurship; Strategic Management Policy; Technology/Innovation; Tourism & Hospitality; Transportation Distribution; Algorithms; Artificial Intelligence; Compilers & Translation; Computer Aided Design (CAD); Computer Aided Manufacturing; Computer Graphics; Computer Organization & Architecture; Database Structures & Systems; Discrete Structures; Internet; Management Information Systems; Modeling & Simulation; Neural Systems/Neural Networks; Numerical Analysis/Scientific Computing; Object Oriented Programming; Operating Systems; Programming Languages; Robotics; Symbolic & Formal Logic; Web Design and emerging paradigms in allied subjects.
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Information Security Service Branding beyond information security awareness

Information Security Service Branding beyond information security awareness

This paper proposes the use of Information Security Service Branding (ISSB) for improving the attitudinal compliance of end-users to information security policies and controls in the organization. ISSB is positioned as a component of the overall ISSM approach of [18] and achieves its objective by gaining commitment of end-users to information security through successful branding of information security in the organization. Also, it is important to note here that information security awareness (ISA) is already an important communication tool used by information security management in organizations to influence end-users. However, as discussed later in section 3, ISA limits itself to a concentration on raising awareness, knowledge and skill levels of end-users; ISA does not focus on repairing the problems caused by the negative image of information security. In this sense, ISSB is complementary to ISA and can be said to exist in addition to, and as a complement of, ISA efforts in the organization.
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To Cloud or Not To. An exploration of the economics of clouds and cyber-security.

To Cloud or Not To. An exploration of the economics of clouds and cyber-security.

client Network >500 picocents/bit ( owner expense) client client Network >5000 picocents/bit CPU Cycle 6-27 picocents CPU Cycle 0.58 picocents app owner >5000 picocents/bit ( ow[r]

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Information Brochure. The ECARES Doctoral School. Quantitative Economics & Economics and Statistics

Information Brochure. The ECARES Doctoral School. Quantitative Economics & Economics and Statistics

It is the obligation of PhD students to write a research paper per year, present it in the internal seminar, and actively participate in the seminar series. Further, the Doctoral School strongly encourages students to at- tend international conferences, summer and winter schools, and workshops in order to present their work. This does not only give the students the chance to meet other researchers but also to improve their pres- entation skills. Last, we help students to visit foreign universities (particularly in the US) for periods between one month and one year. GEnEraL InformatIon
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Information Security at ETH Zurich Institute of Information Security at ETH Zurich Zurich Information Security and Privacy Center

Information Security at ETH Zurich Institute of Information Security at ETH Zurich Zurich Information Security and Privacy Center

A fourth, affiliated group is the Information Security and Cryptography Group led by Prof. Ueli Maurer. Zurich Information Security and Privacy Center The Zurich Information Security & Privacy Center (ZISC) was founded in 2003, to bring together researchers from academia, industry, the financial and ser- vices sector, and public administration for joint efforts in information security. ZISC consists of the following industry partners: ArmaSuisse, Credit Suisse, Google, and Kaba. ZISC academic partners at ETH Zurich are: Information Security Group (D-INFK) led by Prof. David Basin, System Security Group (D-INFK) led by Prof. Srdjan Capkun, Information Security and Cryptography Group (D-INFK) led by Prof. Ueli Maurer, Network Security Group (D-INFK) led by Prof. Adrian Perrig, Communication Systems Group (D-ITET) led by Prof. Bernhard Plattner.
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General Discussion The Economics of Retail Payments Security

General Discussion The Economics of Retail Payments Security

Ms. Alter: I have an unlucky colleague who had an experience where he was mugged at gunpoint in his neighborhood in Chicago. Within maybe a month, he also had his debit card compromised and his account basically drained of cash. And the way those two crimes were treated was very differ- ent. Of course, one was a police report, and the other really was not. And I am just wondering in the case of having a victim, and I do not know if this was viewed as him being the victim of the payment card being compro- mised, but if those two were treated similarly, would that have facilitated a little better data collection? To your point about gaining a little bit more information about fraud rates and those types of crimes?
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Law and Economics of Security Interests in Intellectual Property

Law and Economics of Security Interests in Intellectual Property

interests are a kind of important cost that a debtor has to take into account (the cost of restrictions is only incurred as long as the debtor does not default). The more extensive the restrictions which the security interests can put for the debtor’s use of the encumbered collateral, the more costly the debt finance is for the debtor, especially for those high-quality ones which would have a high cost because of their high probability of non-default (see detailed discussion in Section 2.4.1.1). So, the restrictions can trigger an adverse selection problem. Thus, a secured transaction legal framework should keep the restrictions at the minimum necessary level to ensure the debtor’s continuing utilization of its encumbered IP in the widest possible range of situations. In the case of third parties, the subsequent creditors and assignees may be affected by the existence and terms of the security agreement. In turn, any future loans made by the subsequent creditors, and any subsequent assignments of interests in the collateral, either by the creditor or the debtor, can also impair the original creditor’s ability to collect the original loan back. All the parties therefore have the incentive to take into account the effects of the security interest on the value of all present and future interests in the collateral. For all the third parties, clearly there is a need for information on the secured transaction and the status of the collateral. The original secured creditor also wants to ensure its security interests can be effective against the third parties. Therefore, a secured transaction legal framework must contain an effective mechanism to publicize important information about the secured transaction (including the status of the encumbered collateral) and establish a clear priority order for completing claims from all parties. 276
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Information security management: A case study of an information security culture

Information security management: A case study of an information security culture

Saudi Arabia has been undergoing rapid, major change in all aspects of social, po- litical and economic life. In the past few years of the transformation, the changes included the introduction of a mass privatisation program and the establishment of new institutions supporting the knowledge-based economies, as well as the intro- duction of related laws. As a result of numerous economic and political reforms, Saudi Arabia was able to achieve an advanced position in the knowledge-based economies. This relative economic and political success would appear to indicate that these initiatives have been to a significant extent efficient. However, given the demands of the knowledge economy, Saudi Arabia is faced with the need to effectively manage these initiatives at all levels. Clearly, there are still signifi- cant challenges ahead for Saudi Arabia’s organisations, especially in the area of information security management. In this regard, there is little research about information security management and its issues in Saudi Arabia. In fact, an ex- tensive search by the author of large databases and libraries did not return any research that was entirely dedicated to information security management and re- lated issues. The materials and information used in this section were drawn from different studies on various related topics.
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Essays in information economics and political economy

Essays in information economics and political economy

In general, the Bayesian persuasion approach fits the process of security issuance very well. The issuing party (sender) has to first draft a proposal which will be sent to a potential underwriting bank (receiver). Routinely, the issuer possesses marked flexibility in selecting what to disclose and how precise the disclosure is. In effect, issuers usually exercise discretion in reporting forward-looking information which contributes to the valu- ation of the proposed security. Such information includes but is not limited to forecasts of future sales, earnings, and growth opportunities, which can be either purely qualitative, or quantitative with varying precision – a range or a point estimate. Moreover, issuers often choose to release unique marketing information about business models, corporate strategy, and prospects of the industry to attract potential investors. In sum, the proposal-drafting stage resembles the sender’s communication about the optimally designed signal system to the receiver. After seeing the proposal, the investment bank further investigates the realization of the signal through due diligence if it still cannot decide whether it should underwrite. If the bank agrees to underwrite, it engages in information production with the issuer to prepare the information memorandum (for debt) or prospectus (for equity), which is then circulated to potential investors (other receivers). In this sense, the infor- mation memorandum or prospectus reflects the informativeness of the issuer’s disclosure. The underwriter then prices the security based on the collected information. This stage corresponds to the mapping from the signal realization to the pricing of the security.
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Essays in economics of information and optimal contracting

Essays in economics of information and optimal contracting

graph relates to the feedback effect in capital markets. In order to capture the feedback effect, some insights of the model are required. First, I assume that the project succeeds as long as effort is exerted. Thus, a critical role in our model is played by threshold ˆ c, which denotes the maximum value of effort cost for which an entrepreneur exerts effort in the implementation of his project. This threshold is negatively related to the interest rate the entrepreneur is expected to pay. Suppose now that an investor considers financing an entrepreneur. First, he forms his beliefs about the probability of default, which in this setup coincides with the probability that the en- trepreneur’s cost is above ˆ c. Based on his beliefs, the investor demands an interest rate which allows him to break even. This interest rate affects the threshold ˆ c, which in turn, affects investors beliefs about the probability of default, and so on (feedback effect). We show that the increase in the inter- est rate and the corresponding probability of default, due to the feedback effect, is decreasing in the entrepreneur’s ex-ante efficiency. Thus, for mild information asymmetry, when introducing a CRA, the negative effect on an HEC entrepreneur dominates the positive effect on an LEC entrepreneur. Along these lines, Kliger and Sarig (2000) use a natural experiment to show that credit ratings affect the cost of capital, and Kisgen (2006) shows that a firm’s structural decision is directly affected by credit ratings.
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Three Essays on Economics and Information Shocks

Three Essays on Economics and Information Shocks

One take-away from the last two chapters is that the effects of large-scale shocks on average measurements of health may be smaller than expected. We see something similar in the chapter on social media and punishment. One might predict that introducing social interaction would lead to an enormous increase in punishing (or rewarding) behavior. However, the social condition only had about 21 percent more instances of individuals inflicting punishment and 12 percent more instances of reward, and neither difference is statistically significant. However, on average, the net losses generated by punishment almost doubled. This increase depended on the emergence of unpopular organizations that, due to social information, received concentrated punishment and relatively few rewards. The social condition showed some evidence of an increase in the net effects of rewards. Together these effects generated large increases in inequality across the organizations. The substantial effects on the distribution of points but modest effect on the overall propensity to punish or reward gives away the fact that attention is the main mechanism. The social effects on rewarding behavior appear to result almost entirely from the attention-manipulating algorithm used to dynamically construct the web page. Punishing behavior has some social influence that goes beyond the algorithm, but these effects appear to relate largely to helping potential punishers seek out unpopular organizations. The social condition also had no significant effect on the average degree of self-reported anger. It is—at least in this setting—much easier to manipulate people’s attention and where they direct their efforts than to persuade them to do more or less of some action. Attention-related choices, to the extent that they can be called choices, are made under weak incentives. The value of any potential object of attention cannot even be determined until some attention has been directed to it. Without any information to distinguish the various objects on a screen, attention will be determined by very weak influences, for example, small differences in effort costs related to manipulating the window. Since potentially important choices follow from where attention is directed, the ultimate consequences of small influences on attention may
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Asymmetric Information and Quantization in Financial Economics

Asymmetric Information and Quantization in Financial Economics

The intrinsic information J is the present, most complete and perfectly knowable collection of information concerning the system that is relevant to the measurement exercise 8, 9. One example of this information is exact knowledge characterized by a unitary transform between the observation space and some conjugate space, a situation we exploited in our derivation of Tobin’s Q-theory 10, 11. Another example of J is empirical price data which we have employed in the application of Fisher-information-based statistical mechanics to economics 10–15. To empirical data one can also add assumptions such as the conservation law for probability 6 and it is this approach that we will employ in this paper.
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Essays on economics of information, contract and experimentation

Essays on economics of information, contract and experimentation

This work also relates to literature on information disclosure and per- suasion. Rayo and Segal (2010) and Kolotilin (2015) focus on the sender’s optimal mechanism; Kamenica and Gentzkow (2011) finds the optimal way for the sender to design the structure of the experiment, and Bergemann, Bonatti and Smolin (2015) consider a monopolist who can design the exper- iment and set the selling price. They all focus on public experimentation, where results can be publicly observed. In contrast, My work mainly focuses on the private case, and also compared the di↵erence between public and pri- vate case. Glazer and Rubinstein (2004, 2006) and Hart, Kremer and Perry (2017) analyse the commitment in evidence games where the agent’s set of hard evidence is exogenously given. Compared to them, the agent can pri- vately generate hard evidence given his type in my work. DeMarzo, Kremer and Skrzypacz (2017) also consider an uninformed agent who chooses one test among many di↵erent tests and strategically reveals the result to the market. In their paper the market is competitive, and the agent has only one chance to take a test, in which the null result with positive probability is introduced and is not verifiable. The decision of the principal in my work shares the same property as that of the competitive market. Compared to DeMarzo, Kremer and Skrzypacz (2017), the information structure of the experiment is exoge- nously given in my work, and it has the property of the softest test in which the good type always succeeds but the bad type fails with positive probability. Also, in my work, the agent has infinite opportunity for experimenting even though the information structure of the test is fixed. My work also discusses the agent’s optimal commitment, which is absent in theirs.
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INFORMATION BOOK FOR UNDERGRADUATE ECONOMICS MAJORS

INFORMATION BOOK FOR UNDERGRADUATE ECONOMICS MAJORS

Preparing for Graduate School in Economics: The department offers students interested in further study of economics outstanding opportunities to prepare themselves for challenging graduate programs. Tell your advisor that you are potentially interested in graduate study, and ask for suggestions. If you advance quickly, it is possible to take graduate courses. Top-ranked graduate schools look for: good grades in economics and math courses; high scores on the quantitative and verbal aptitude sections of the GRE; excellent recommendations; and strong math background-- preferably including calculus of several variables, linear algebra, and probability and statistics as they are used in modern economics. It is to your advantage to work on research with or under a faculty member, either through an honors thesis, directed reading and research (Econ 139D), or as a research-assistant position (see Section IX). Other ways to get to know faculty are to TA in an introductory course and through the Stanford Economics Association (SEA).
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Economics of Information and Advertising: A Comparative Analysis in View of Conventional and Islamic Economics

Economics of Information and Advertising: A Comparative Analysis in View of Conventional and Islamic Economics

The Prophet said, "A time will come when one will not care how one gains one's money, legally or illegally” (Al-Bukhari-3:275). Since, Persuasion is haram (illegal) and harmful for the society, persuasive advertising is forbidden in Islam permanently (Al-Bukhari- 3:300). In contrast, the scene is reversed in the contemporary advertising; it uses different tools and ways of persuasion to attract the consumers. Among these, women, Nudity, obscenity, sexual appeals, Music, song, lie, bluffness, and exaggeration, incomplete or imperfect information, against social, cultural and religious norms-are mostly used tools in the world (Saeed et al., 2001). These tools are strictly prohibited in Islam (Al-Bukhari-1:17, 23). The glamorous Women are vastly used in advertising by exposing their body parts just to enhance the attention of consumer to the products (Akhtar et al., 2011). Alarmingly, such types of obscenity and nudity captured the advertising industry through the scene of short dressed women, women’s’ bathing, excited song, free mixing of men-women, private moment of men-women and so more (Chachula et al., 2009). Islam allowed women to partake in business activities, but not to mislead people by emotional and sexual stimulation. For a woman in Islam is not allowed to show any part of the body except face, hands and feet. Allah says “Say to the believing men and women that they restrain their looks and guard their private parts. That is purer for them (Al-Quran-24:31-32). Moreover, the Prophet (pbuh) prohibited the prices and earnings of singing girls (Al-Tirmidhi-14:1286).
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