Posts tagged behavioral economics

Boomtime: Risk as Economics (Notes)

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Thank you, internets, for all the feedback I’ve gotten on BoomTime: Risk As Economics. Of course my slides are nigh indecipherable without my voiceover, and my notes didn’t make it to the slideshare, so here are some notes to fill in (some) of the blanks until the video hits YouTube (SiRA members will get early access to SiRAcon15 videos via the SiRA Discourse forum, BTW). (You will want to look at the notes and the slides side by side, probably, as one doesn’t make sense w/o the other.)

An intro here is that in addition to being a product manager specializing in designing large-scale, data-driven security/anti-fraud/anti-abuse automation (yep, that’s a thing), I’m also an economics nerd. (Currently working on an MS in Applied Econ at JHU). Given my background in payments, and a general penchant for “following the money”, framing technology problems on platforms through an economic/financial lens is second nature.

Themes of Security Economics

A list of typical themes one hears when discussing information security & economics: within businesses we are requested to talk about exposures and threats in terms of financial impact, or consider the financial (money) drivers. Also the theme of information asymmetries (Market for Lemons) is a big theme of information economics and of software markets in general: when information about quality of a product is difficult to find, that lack of transparency drives down prices, and we get less incentives to improve quality. (Ask me questions about market signals as a mechanism for correcting information asymmetries.) “Make it more expensive for the attacker” or “don’t outrun the bear, outrun the guy next to you” is also an idea that gets raised. Game theory, concepts of quantifying “risk” (exposure, tolerance), markets for exploits & vulns is a hot topic at the moment, as is behavioral economics and all things related to incentive design – gamification being the most buzzwordy example, perhaps, but framing as a method for improving consumers’ ability to make good choices related to privacy preferences also something that has come up a bit lately in security economics research. Anyway, these are some themes that tend to be repeated in recent research literature.

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Read on, readers

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Last week I stopped into SOURCE Dublin to give a follow-up to my recent talk in Boston, another foray into game theory (Games We Play: Payoffs & Chaos Monkeys) — this time w/some more advanced mathiness and references back into behavioral economics. Anyway, I still owe some explanatory blog posts to support some of the materials I had to rush through (to get everything into 45 minutes), but first thing I wanted to share is my working reading list. I’m finishing up reading some other books which I’ll post later but this is a good overview and will get folks interested in the topics headed in the right direction.

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