Data Breaches and Identity Theft

Federal Reserve Bank of Atlanta Working Paper No. 2008-22

54 Pages Posted: 9 Nov 2008

See all articles by William Roberds

William Roberds

Federal Reserve Bank of Atlanta

Stacey Schreft

Government of the United States of America - Office of Financial Research; Board of Governors of the Federal Reserve System

Date Written: September 1, 2008

Abstract

This paper presents a monetary-theoretic model to study the implications of networks' collection of personal identifying data and data security on each other's incidence and costs of identity theft. To facilitate trade, agents join clubs (networks) that compile and secure data. Too much data collection and too little security arise in equilibrium with noncooperative networks compared with the efficient allocation. A number of potential remedies are analyzed: mandated limits on the amount of data collected, mandated security levels, reallocations of data-breach costs, and data sharing through a merger of the networks.

Keywords: identity theft, identity fraud, data breach, fraud, money, search

JEL Classification: D83, E42, G28

Suggested Citation

Roberds, William and Schreft, Stacey L., Data Breaches and Identity Theft (September 1, 2008). Federal Reserve Bank of Atlanta Working Paper No. 2008-22, Available at SSRN: https://ssrn.com/abstract=1296131 or http://dx.doi.org/10.2139/ssrn.1296131

William Roberds (Contact Author)

Federal Reserve Bank of Atlanta ( email )

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Stacey L. Schreft

Government of the United States of America - Office of Financial Research ( email )

717 14th Street, NW
Washington DC, DC 20005
United States

Board of Governors of the Federal Reserve System ( email )

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Washington, DC 20551
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