Dangerous Games: A Literature Review on Cybersecurity Investments

Alessandro Fedele and Cristian Roner ()
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Cristian Roner: Free University of Bolzano‐Bozen, Faculty of Economics and Management

No BEMPS75, BEMPS - Bozen Economics & Management Paper Series from Faculty of Economics and Management at the Free University of Bozen

Abstract: Cybersecurity has gained prominence in the decision-making of firms. Due to the increasing occurrences of threats in the cyberspace, investments in cybersecurity have become critical to mitigate the operational disruption of businesses. This paper surveys the theoretical literature on the firms’ incentives to invest in cybersecurity. A taxonomy of the existing contributions is provided to frame them in a common reference scheme and a model is developed to encompass such contributions and discuss their main findings. Papers that investigate the investment problem of an isolated firm are distinguished from those that consider interdependent firms. In turn, interdependent cybersecurity is analyzed in three different contexts: (i) firms that operate their business via a common computer network, but are not competitors in the product market; (ii) firms that are competitors in the product market, but run their business using non-interconnected computer systems; (iii) firms that are competitors and rely on a common computer network. Promising avenues for future research are discussed in the conclusions.

Keywords: Cybersecurity investments; interdependent cybersecurity; computer networks; product market competition (search for similar items in EconPapers)
JEL-codes: C72 D62 D81 L86 M15 (search for similar items in EconPapers)
Pages: [35 pages]
Date: 2020-12
New Economics Papers: this item is included in nep-bec
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Journal Article: Dangerous games: A literature review on cybersecurity investments (2022)
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