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Topic:
What are the economic considerations of information security and its management?
Essay Instructions:
Cost Benefit Analysis:
Revisit Bruce Schneier's presentation in module two. This time, please focus on his discussions on cost/benefit analysis.
Multi-media Presentation by Schneier, Bruce. (2008) Reconceptualizing Security on topics of Security Feeling, Reality and Model. Infosecurity Europe, April 23, 2008. Video http://www(dot)yada-yada(dot)co(dot)uk/podcasts/ReedExhibitions/InfosecurityEurope/video/BruceSchneier.html.
Audio http://www(dot)yadayada(dot)co(dot)uk/podcasts/ReedExhibitions/InfosecurityEurope/audio/Hall_of_Fame_BruceSchneier.mp3.
If you don't have access to the multimedia presentation, then simply read his article mentioned in module two. The article is:
Schneier, Bruce. The Psychology of Security. http://www(dot)schneier(dot)com/essay-155.html.
The following article provides an example how such a cost/benefit analysis is considered.
Schneier, Bruce. Security at What Cost? National ID System Is Not Worth The $23 Billion Price Tag. http://www(dot)schneier(dot)com/essay-207.html.
The following artilce uses some typical accounting measurements for economics of information security.
Gordon, L. A., & Richardson, R. (2004). The New Economics of Information Security. Optimize. April 2004. p83-867 Trident library)
The following article recaps what we talked about perceptions of security. More importantly, it discusses how people generally do not perceive gains and costs equally. When you conduct a cost/benefit analysis of security, you should keep that in mind.
West, Ryan (2008). The Psychology of Security. Communications of the ACM, Apr2008, Vol. 51 Issue 4. pp34-40.
II. Incentive Design:
The economics of information security is not only about cost/benefit analysis of implementing a security measure. Another major topic in economics is mechanism design, which provides principles and methods (like game theory) to help design incentive-compatible mechanisms that ensure participants are better off behaving honestly than dishonestly. See the following article to get a peek:
The Economist. (2007) Intelligent Design. Oct 18th, 2007. http://www(dot)economist(dot)com/finance/displaystory.cfm?story_id=9988840
To know more about the three Nobel Prize winners in 2007 economics division, surf http://nobelprize(dot)org/nobel_prizes/economics/laureates/2007/ and check them out.
It is not easy to understand the revelation principle or the incentive-compatible design. I introduce you the concepts here for the purpose of making you aware of such a method. It takes time to learn how to design a game (a mechanism) that every party is better off by being honest.
Well, on a lighter note. Interestingly, a movie called "Mad Money" tells a story of three female employees of the Federal Reserve Bank stealing money that is about to be shredded. It is not a movie that I recommend to watch a second time, but it is entertaining enough to watch once. The movie is also a fit for the educational purpose here. I suggest you watch it once when you get a chance during this term, and pay special attention to the human factors -- especially the incentives of the thieves and the Chief Security Officer.
III. Other Economics Issues as to Security:
As a matter of fact, there are many aspects in applying economics to information security. The following article has mentioned a list of authors that research economics of information security and provided a brief overview of their research:
Anderson R. and Schneier B., (2005) Economics of Information Security, IEEE Security and Privacy 3 (1), 2005, pp. 12-13. (Retrieved May 19, 2008).
To know more in depth, you can choose to view the video (optional):
Schneier, Bruce. (2007) The Economics of Information Security. Public lecture at the London School of Economics, March 21, 2007. http://video(dot)google(dot)co(dot)uk/videoplay?docid=1240510734423516533.
You are probably overwhelmed now with all these economics. I hope you also have broadened your views on security and have said "wow" to yourself that now you hold a much broader view on security and how to approach it from economic perspective.
Please write a 3-4 page paper discussing what you have learned:
What are the economic considerations of information security and its management?
Expectations:
In preparing your paper, you need to discuss the following issues, and support with arguments and evidences:
what are the major economic considerations in information security and management?
are these economic considerations serving their purposes?
why do these economic measures help?
how to make economic mechanisms that help improve information security and management?
Essay Sample Content Preview:
 Economic considerations of information security and its management
Student`s name
Student`s number
Institutions name
Major economic considerations in information security and management.
There are a number of considerations that should be made before effecting any policies and plans in the field of information security and management. The first consideration is the cost. There are information security measures that can be undertaken to ensure security such as the computerization of all demographic information. This can facilitate easier identification of people and ensure safety of citizens and businesses. However, the costs associated with such procedures are enormous and uneconomical. The linkages that require being in place for the functionality of such a system are costly and would cost the tax payers a lot in maintenance (Gordon, 2000). For the federal government to implement such far reaching systems, it would have to sacrifice other vital areas of its budgetary allocations like health care and education. The benefits to the economy that would be foregone in implementation of such security installations are by far much important.
Another consideration that should be made is the effect of information security systems on the lifestyles of people. There are information surveillance reports that may prevent people from visiting some areas or using some routes. The security organs should weigh the pros and cons of implementing such measures. This is because they can create panic and uncertainty to a majority of citizens. This uncertainty and panic will affect businesses and conduct of activities in particular areas that may be irreversible. It can guide future business decisions by investors in particular areas.
Besides cost and lifestyles, the other economic consideration in information security and management is risk. Security organs can preempt their investigations to the public through issuance of alerts. This can pose severe risks to the same people who they are protecting and to the security network. It can open the way to fraudsters to devise more sophisticated measures since they will be aware that they have been curtailed.
Are these economic considerations serving their purposes?
Yes. These considerations are at the core of the implementation strategies of information security and management. The federal government ensures that all citizens are secure through implementation of legislation such as the Federal Information Security Management Act 2002. This ensures that information is in the right hands and is not exposed to outsiders or anybody who may have bad intentions. However, th...
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