The Economics of Sharing Unclassified Cyber Threat Intelligence by Government Agencies and Departments

This paper extends the literature on the economics of sharing cybersecurity information by and among profit-seeking firms by modeling the case where a government agency or department publicly shares unclassified cyber threat information with all organizations. In prior cybersecurity information sharing models a common element was reciprocity—i.e., firms receiving shared information are also asked to share their private cybersecurity information with all other firms (via an information sharing arrangement). In contrast, sharing of unclassified cyber threat intelligence (CTI) by a government agency or department is not based on reciprocal sharing by the recipient organizations. After considering the government’s cost of preparing and disseminating CTI, as well as the benefits to the recipients of the CTI, we provide sufficient conditions for sharing of CTI to result in an increase in social welfare. Under a broad set of general conditions, sharing of CTI will increase social welfare gross of the costs to the government agency or department sharing the information. Thus, if the entity can keep the sharing costs low, sharing cybersecurity information will result in an increase in net social welfare.

Optimal configuration of firewall, IDS and vulnerability scan by game theory

The integrated linkage control problem based on attack detection is solved with the analyses of the security model including firewall, intrusion detection system （IDS） and vulnerability scan by game theory. The Nash equilibrium for two portfolios of only deploying IDS and vulnerability scan and deploying all the technologies is investigated by backward induction. The results show that when the detection rates of IDS and vulnerability scan are low, the firm will not only inspect every user who raises an alarm, but also a fraction of users that do not raise an alarm; when the detection rates of IDS and vulnerability scan are sufficiently high, the firm will not inspect any user who does not raise an alarm, but only inspect a fraction of users that raise an alarm. Adding firewall into the information system impacts on the benefits of firms and hackers, but does not change the optimal strategies of hackers, and the optimal investigation strategies of IDS are only changed in certain cases. Moreover, the interactions between IDS ＆ vulnerability scan and firewall ＆ IDS are discussed in detail.

Information Segmentation and Investing in Cybersecurity

This paper provides an analysis of how the benefits of information segmentation can assist an organization to derive the appropriate amount to invest in cybersecurity from a cost-benefit perspective. An analytical model based on the framework of the Gordon-Loeb Model ([1]) is presented that provides a set of sufficient conditions for information segmentation to lower the total investments in cybersecurity and the expected loss from cybersecurity breaches. A numerical example illustrating the insights gained from the model is also presented.

Investing in Cybersecurity: Insights from the Gordon-Loeb Model

Given the importance of cybersecurity to the survival of an organization, a fundamental economics-based question that must be addressed by all organizations is: How much should be invested in cybersecurity related activities? Gordon and Loeb [1] presented a model to address this question, and that model has received a significant amount of attention in the academic and practitioner literature. The primary objective of this paper is to discuss the Gordon-Loeb Model with a focus on gaining insights for the model’s use in a practical setting.