Abstract
Breaches of network security can result in substantial losses for businesses. A game theory-based model is developed to investigate in the short run how network externality influences the optimal strategy of competing online firms producing homogenous services to invest in NS. A firm's self-protect rate and survival probability against NS security incidents differ depending on its related investment decisions. The incentive of a firm to invest in NS is derived, and the impact of the survival probability and the effect of the number of firms investing in NS on a firm's incentive to invest in NS are also analyzed. Policy implications drawn from the study are provided at the end the work.
Original language | English |
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Pages (from-to) | 398-404 |
Number of pages | 7 |
Journal | Economic Modelling |
Volume | 36 |
DOIs | |
Publication status | Published - 2014 Jan |
All Science Journal Classification (ASJC) codes
- Economics and Econometrics