Economics of Internet Security
Jean Walrand, Nikhil Gopinath Shetty, Mark Felegyhazi1 and Galina Schwartz2
National Science Foundation
Internet security is widely accepted to be a problem of incentives and economics rather than a technical problem. The goal of this research is to study how the lack of incentives hinders the application of security protocols and to propose mechanisms that enable us to increase social welfare by improving security. In this proposal, we wish to investigate the effect of solutions like mandatory due care or cyber-insurance on security. The required mandates on ISPs, software manufacturers, users, etc., will be studied. We will also look into the stability of these solutions under asymmetric information uncertainty between insurers and the insuree. Architectural modifications that improve information revelation and symmetry and enable these regulations will be evaluated and solutions will be proposed.