Despite the conventional wisdom that proactive security is superior to reactive security, we show that reactive security can be competitive with proactive security as long as the reactive defender learns from past attacks instead of myopically overreacting to the last attack. Our game-theoretic model follows common practice in the security literature by making worst-case assumptions about the attacker: we grant the attacker complete knowledge of the defender’s strategy and do not require the attacker to act rationally. In this model, we bound the competitive ratio between a reactive defense algorithm (which is inspired by online learning theory) and the best fixed proactive defense. Additionally, we show that, unlike proactive defenses, this reactive strategy is robust to a lack of information about the attacker’s incentives and knowledge.
Anderson @cite_14 and Varian @cite_17 informally discuss (via anecdotes) how the design of information security must take incentives into account. August and Tunca @cite_10 compare various ways to incentivize users to patch their systems in a setting where the users are more susceptible to attacks if their neighbors do not patch.
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We study the effect of user incentives on software security in a network of individual users under costly patching and negative network security externalities. For proprietary software or freeware, we compare four alternative policies to manage network security: (i) consumer self-patching (where no external incentives are provided for patching or purchasing); (ii) mandatory patching; (iii) patching rebate; and (iv) usage tax. We show that for proprietary software, when the software security risk and the patching costs are high, for both a welfare-maximizing social planner and a profit-maximizing vendor, a patching rebate dominates the other policies. However, when the patching cost or the security risk is low, self-patching is best. We also show that when a rebate is effective, the profit-maximizing rebate is decreasing in the security risk and increasing in patching costs. The welfare-maximizing rebates are also increasing in patching costs, but can be increasing in the effective security risk when patching costs are high. For freeware, a usage tax is the most effective policy except when both patching costs, and security risk are low, in which case a patching rebate prevails. Optimal patching rebates and taxes tend to increase with increased security risk and patching costs, but can decrease in the security risk for high-risk levels. Our results suggest that both the value generated from software and vendor profits can be significantly improved by mechanisms that target user incentives to maintain software security. The advent of the Internet has made the transmission of personally identifiable information more common and often unintended by the user. As personal information becomes more accessible, individuals worry that businesses misuse the information that is collected while they are online. Organizations have tried to mitigate this concern in two ways: (1) by offering privacy policies regarding the handling and use of personal information and (2) by offering benefits such as financial gains or convenience. In this paper, we interpret these actions in the context of the information-processing theory of motivation. Information-processing theories, also known as expectancy theories in the context of motivated behavior, are built on the premise that people process information about behavior-outcome relationships. By doing so, they are forming expectations and making decisions about what behavior to choose. Using an experimental setting, we empirically validate predictions that the means to mitigate privacy concerns are associated with positive valences resulting in an increase in motivational score. In a conjoint analysis exercise, 268 participants from the United States and Singapore face trade-off situations, where an organization may only offer incomplete privacy protection or some benefits. While privacy protections (against secondary use, improper access, and error) are associated with positive valences, we also find that financial gains and convenience can significantly increase individuals' motivational score of registering with a Web site. We find that benefits-monetary reward and future convenience-significantly affect individuals' preferences over Web sites with differing privacy policies. We also quantify the value of Web site privacy protection. Among U.S. subjects, protection against errors, improper access, and secondary use of personal information is worth @math 44.62. Finally, our approach also allows us to identify three distinct segments of Internet users-privacy guardians, information sellers, and convenience seekers. In recent years, many organizations have established bounty programs that attract white hat hackers who contribute vulnerability reports of web systems. In this paper, we collect publicly available data of two representative web vulnerability discovery ecosystems (Wooyun and HackerOne) and study their characteristics, trajectory, and impact. We find that both ecosystems include large and continuously growing white hat communities which have provided significant contributions to organizations from a wide range of business sectors. We also analyze vulnerability trends, response and resolve behaviors, and reward structures of participating organizations. Our analysis based on the HackerOne dataset reveals that a considerable number of organizations exhibit decreasing trends for reported web vulnerabilities. We further conduct a regression study which shows that monetary incentives have a significantly positive correlation with the number of vulnerabilities reported. Finally, we make recommendations aimed at increasing participation by white hats and organizations in such ecosystems. According to one common view, information security comes down to technical measures. Given better access control policy models, formal proofs of cryptographic protocols, approved firewalls, better ways of detecting intrusions and malicious code, and better tools for system evaluation and assurance, the problems can be solved. The author puts forward a contrary view: information insecurity is at least as much due to perverse incentives. Many of the problems can be explained more clearly and convincingly using the language of microeconomics: network externalities, asymmetric information, moral hazard, adverse selection, liability dumping and the tragedy of the commons.