Externalities

Applying Behavioral Economics to Improve Cyberspace Strategy

Applying Behavioral Economics to Improve Cyberspace Strategy

Addressing cybersecurity through an economic lens highlights the impact of market failures—information asymmetries and misaligned incentives. Some entities fail to invest in adequate security controls because they do not incur the full costs associated with a security incident. The current public and private divide creates an environment where society shoulders most of the risk of cyber-insecurity. To keep pace with relevance, all organizations, including those beyond critical infrastructure sectors, must be able to share information and respond to cyber risk in as close to real-time as possible.