Decius wrote:
This Ross Anderson paper from 2001 is worth (re-)reading. I'd be interested in any pointers to further reading along these lines.

I particularly liked this quote, from the French economist Jules Dupuit in 1849:

It is not because of the few thousand francs which would have to be spent to put a roof over the third-class carriage or to upholster the third-class seats that some company or other has open carriages with wooden benches ... What the company is trying to do is prevent the passengers who can pay the second-class fare from traveling third class; it hits the poor, not because it wants to hurt them, but to frighten the rich ... And it is again for the same reason that the companies, having proved almost cruel to the third-class passengers and mean to the second-class ones, become lavish in dealing with first-class customers. Having refused the poor what is necessary, they give the rich what is superfluous.

Here's the abstract of the paper:

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.

In this note, I put 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.

Anderson has been working this theme over the past several years; his latest paper is The Economics of Information Security - A Survey and Open Questions.

I would like to read this, but the PDF link is dead.

Jello wrote:
I would like to read this, but the PDF link is dead.

The extension was simply repeated. I updated my copy.