The Market Consequences of Cybersecurity
Full Title of Reference
The Market Consequences of Cybersecurity: Defining Externalities and Ways to Address Them
OECD, The Market Consequences of Cybersecurity: Defining Externalities and Ways to Address Them, in Computer Viruses and Other Malicious Software (OECD, 2009). Purchase
Issues: Economics of Cybersecurity
This chapter asks the following questions: Are participants in the information and communication markets responding adequately to malware, or are improvements possible? Pointing to a variety of reports that show increases in malicious attack trends, one might conclude that markets are not responding adequately. The analysis revealed a more nuanced picture.
Additional Notes and Highlights
Three major categories of externalities Category 1: No externalities; market participants absorb all the costs of their security decisions. Category 2: Externalities are created, but they are borne by agents that can manage them. The ISP example The case of online financial services Category 3: Externalities are borne fully by other market participants or by society at large. The case of lax security by end users Distributional and efficiency effects Survey results on the costs of malware Key findings