Dynamic competition in IT security: A differential games approach

Tridib Bandyopadhyay (), Dengpan Liu (), Vijay S. Mookerjee () and Allen W. Wilhite ()
Additional contact information
Tridib Bandyopadhyay: Kennesaw State University
Dengpan Liu: Iowa State University
Vijay S. Mookerjee: The University of Texas at Dallas
Allen W. Wilhite: University of Alabama at Huntsville

Information Systems Frontiers, 2014, vol. 16, issue 4, No 8, 643-661

Abstract: Abstract Hackers evaluate potential targets to identify poorly defended firms to attack, creating competition in IT security between firms that possess similar information assets. We utilize a differential game framework to analyze the continuous time IT security investment decisions of firms in such a target group. We derive the steady state equilibrium of the duopolistic differential game, show how implicit competition induces overspending in IT defense, and then demonstrate how such overinvestment can be combated by innovatively managing the otherwise misaligned incentives for coordination. We show that in order to achieve cooperation, the firm with the higher asset value must take the lead and provide appropriate incentives to elicit participation of the other firm. Our analysis indicates that IT security planning should not remain an internal, firm-level decision, but also incorporate the actions of those firms that hackers consider as alternative targets.

Keywords: IT security; Dynamic games; Competing defense; Cyber defense; Investment in IT security (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
http://link.springer.com/10.1007/s10796-012-9373-x Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:infosf:v:16:y:2014:i:4:d:10.1007_s10796-012-9373-x

Ordering information: This journal article can be ordered from
http://www.springer.com/journal/10796

DOI: 10.1007/s10796-012-9373-x

Access Statistics for this article

Information Systems Frontiers is currently edited by Ram Ramesh and Raghav Rao

More articles in Information Systems Frontiers from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().