Real Option Applications to Information Security

Abstract:     
Real options present advantages over the standard discounting methods. In this paper we analyze them briefly and examine their potential applications on information security. The applications of real options on valuation of information assets, information security investment and capital budgeting provide considerable benefits. Finally portfolios of real options and other financial products can reduce information security risk.

Number of Pages in PDF File: 11

Keywords: Real options, information security, valuation, information security investment, capital budgeting, portfolio theory, information security risk

JEL Classification: L86, D46, D89, E22, G11, G12, G31

Accepted Paper Series