Structural models for fog computing based internet of things architectures with insurance and risk management applications

Xiaoyu Zhang, Maochao Xu, Jianxi Su and Peng Zhao

European Journal of Operational Research, 2023, vol. 305, issue 3, 1273-1291

Abstract: Cybersecurity risk modeling and pricing are becoming a spotlight in actuarial science and operational research. This paper pertains to the analysis of the cybersecurity risks involved in the fog computing technology which has been intensively deployed in assorted Internet of Things (IoT) applications. To this end, a class of structural models are established to study the inherent cyber risk propagation process. Under the smart home applications, we manage to compute the compromise probabilities of individual nodes explicitly. Applications of the proposed structural models in the context of cyber insurance pricing are thoroughly explored. Finally, we propose an interval method for estimating the compromise probabilities of fog network’s elements, which can be used to efficiently identify weak nodes for cybersecurity risk management.

Keywords: Applied probability; Actuarial pricing principles; Comonotonic approximation; Risk propagation; Smart home (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:305:y:2023:i:3:p:1273-1291

DOI: 10.1016/j.ejor.2022.07.033

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