An introduction to key themes in the economics of cyber security

Neil Gandal*

*Corresponding author for this work

Research output: Chapter in Book/Report/Conference proceedingChapterpeer-review


Software security is an important concern for vendors, consumers, and regulators since attackers who exploit vulnerabilities can cause significant damage. In this brief paper, I discuss key themes in the budding literature on the economics of cyber-security. My primary focus is on how economics incentives affect the major issues and themes in information security. Two important themes relevant for the economics of cyber security issues are (i) a security externality and (ii) a network effect that arises in the case of computer software. A nascent economics literature has begun to examine the interaction between vulnerability disclosure, patching, product prices and profits.

Original languageEnglish
Title of host publicationCyber Warfare and Cyber Terrorism
PublisherIGI Global
Number of pages5
ISBN (Print)9781591409915
StatePublished - 2007


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