| Preface | 5 |
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| List of Contributors | 7 |
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| Contents | 10 |
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| Chapter 1 Introduction and Overview | 17 |
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| 1.1 Introduction | 17 |
| 1.2 The Economics of Information Security and Privacy | 18 |
| 1.3 Overview of the Book’s Contributions | 19 |
| Chapter 2 The Price of Uncertainty in Security Games | 24 |
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| 2.1 Introduction | 25 |
| 2.2 Decision Theoretic Model | 27 |
| 2.2.1 Basic Model | 27 |
| 2.2.2 Player Behavior | 28 |
| 2.2.3 Information Conditions | 29 |
| 2.2.4 Remarks on Basic Results | 30 |
| 2.2.5 Outlook on Further Analyses | 31 |
| 2.3 Price of Uncertainty Metrics | 31 |
| 2.3.1 The Price of Uncertainty | 31 |
| 2.3.2 Three Metrics for the Price of Uncertainty | 31 |
| 2.3.3 Discussion of the Definitions | 32 |
| 2.3.3.1 The Difference Metric | 32 |
| 2.3.3.2 The Payoff-Ratio Metric | 32 |
| 2.3.3.3 The Cost-Ratio Metric | 33 |
| 2.4 Analysis | 33 |
| 2.4.1 Best Shot Game | 33 |
| 2.4.1.1 The Best Shot Difference Metric: | 34 |
| Observations. | 34 |
| 2.4.1.2 The Best Shot Payoff-Ratio Metric | 35 |
| Observations. | 35 |
| 2.4.1.3 The Best Shot Cost-Ratio Metric | 36 |
| Observations. | 36 |
| 2.4.2 Weakest Link Game | 36 |
| 2.4.2.1 The Weakest Link Difference Metric: | 37 |
| Observations. | 38 |
| 2.4.2.2 The Weakest Link Payoff-Ratio MetricWPoU2( | 39 |
| Observations. | 40 |
| 2.4.2.3 The Weakest Link Cost-Ratio MetricWPoU3( | 40 |
| Observations. | 40 |
| 2.4.3 Total Effort Game | 41 |
| 2.4.3.1 The Total Effort Difference Metric: | 41 |
| Observations. | 42 |
| 2.4.3.2 The Total Effort Payoff-Ratio Metric: | 42 |
| Observations. | 43 |
| 2.4.3.3 The Total Effort Cost-Ratio Metric: | 43 |
| Observations. | 43 |
| 2.5 Conclusions | 44 |
| References | 46 |
| Chapter 3 Nobody Sells Gold for the Price of Silver:Dishonesty, Uncertainty and the UndergroundEconomy | 48 |
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| 3.1 Introduction | 49 |
| 3.2 Related Work | 51 |
| 3.2.1 Studies of the Underground Economy | 51 |
| 3.2.2 Economics of Security and of the Underground Economy | 52 |
| 3.2.3 Economics Background | 53 |
| 3.2.3.1 Asymmetric Information: The Market for Lemons | 53 |
| 3.2.3.2 The Theory of the Firm | 54 |
| 3.3 The Underground Economy is a Market for Lemons | 55 |
| 3.3.1 The Types of Goods and Services Offered for Sale on the Underground Economy | 55 |
| 3.3.1.1 Goods | 55 |
| 3.3.1.2 Services | 56 |
| 3.3.2 Is this a Market for Lemons? | 56 |
| 3.3.2.1 Asymmetry of Information | 56 |
| 3.3.2.2 No Credible Disclosure | 57 |
| 3.3.2.3 Continuum of Seller Quality or Low Seller Quality | 57 |
| 3.3.2.4 Lack of Quality Assurance or Regulation | 58 |
| 3.3.2.5 Summary | 59 |
| 3.4 Analysis and Implications | 59 |
| 3.4.1 Countermeasures Ought to be Easy: Lemonizing the Market | 59 |
| 3.4.2 The Ripper Tax | 60 |
| 3.4.3 Formation of Firms and Alliances | 60 |
| 3.4.4 A Two-Tier Underground Economy | 61 |
| 3.4.5 What Can We Estimate From Activity on IRC Markets? | 62 |
| 3.4.5.1 What Can We Say about Participants in a Lemon Market? | 62 |
| 3.4.5.2 Activity Does not Imply Dollars | 63 |
| 3.4.5.3 Activity Does Imply Competition | 64 |
| 3.4.5.4 What Can We Say About the Goods Offered in a Lemon Market? | 64 |
| 3.4.6 Who are We Fighting? What are We Trying to Accomplish? | 64 |
| 3.5 Conclusion | 65 |
| References | 67 |
| Chapter 4 Security Economics and Critical NationalInfrastructure | 69 |
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| 4.1 Introduction | 70 |
| 4.2 Critical Infrastructure: Externalities of Correlated Failure | 71 |
| 4.3 Regulatory Approaches | 73 |
| 4.4 Security or Reliability? | 74 |
| 4.5 Cross-Industry Differences | 75 |
| 4.6 Certification and Lifecycle Management | 75 |
| 4.7 The Roadmap | 77 |
| 4.8 Conclusions | 78 |
| References | 79 |
| Chapter 5 Internet Multi-Homing Problems:Explanations from Economics | 81 |
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| 5.1 Introduction | 81 |
| 5.2 How Internet RoutingWorks | 82 |
| 5.3 The ‘Global Routing Table’ | 83 |
| 5.4 IPv6 | 85 |
| 5.4.1 SHIM6 | 87 |
| 5.4.2 The Lack of Incentives for SHIM6 Deployment | 87 |
| 5.4.3 Cooperating ISPs | 88 |
| 5.5 Discouraging Growth in the Global Routing Table | 89 |
| 5.6 Related Work on the Economics of Protocols | 90 |
| 5.7 Conclusions | 91 |
| References | 92 |
| Chapter 6 Modeling the Security Ecosystem- The Dynamics of (In)Security | 93 |
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| 6.1 Introduction | 93 |
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