Cyber Crime: Security Under Scarce Resources

Abstract

Cyber crime covers a wide range of activities that includes theft, fraud and harassment; stealing valuable intellectual property as part of industrial espionage; committing financial fraud and credit card theft; and disrupting internet services for ideological goals (“hacktivism”). The crimes target both firms and consumers, and while they rarely result in physical harm or property damage, there can still be severe consequences. This paper frames the topic as a discussion of two markets: one of information security, occupied by victims (e.g., firms and consumers), and one of threats, where buyers and sellers of malicious software and stolen information trade their goods.

Keywords: cyber crime, crime, economics of information security, malware, cyber insurance