Yoon-Ho Choi, Journal of Internet Computing and Services, Vol. 15, No. 3, pp. 91-100, Jun. 2014
10.7472/jksii.2014.15.3.91, Full Text:
Keywords: Decision Making, mathematical analysis, investment on security solutions, optimal security investment

Abstract

While IT security investment of organizations has been increased, the amount of the monetary loss of organizations caused by IT security breaches did not decrease as much as their expectation. Also, from surveys, it was discovered that the poor usage of their security budget thwarted the improvement of the organization's security level. In this paper, to resolve the poor usage of security budget of organizations, we propose a comprehensive economic model for determining the optimal amount of investment in security solutions, including the proactive security solutions(PSSs) and the reactive security solutions(RSSs). Using the proposed analytical model under different parameters of security solutions, we show the optimal condition to maximize the expected net benefits from IT security investment of organizations. Also, we verify the common belief that the optimal level of investment in security solutions is an increasing function of vulnerability. Through simulations, we find the optimal level of IT security investment, given parameters of different characteristics of security solutions.

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