Who Should Pay for Interdependent Risk? Policy Implications for Security Interdependence Among Airports

G. Kuper; F. Massacci; W. Shim; J. Williams

doi:10.1111/risa.13454

Who Should Pay for Interdependent Risk? Policy Implications for Security Interdependence Among Airports

G. Kuper
, F. Massacci
, W. Shim
, J. Williams

Research output: Contribution to Journal › Article › Academic › peer-review

Abstract

© 2020 The Authors. Risk Analysis published by Wiley Periodicals, Inc. on behalf of Society for Risk AnalysisWe study interdependent risks in security, and shed light on the economic and policy implications of increasing security interdependence in presence of reactive attackers. We investigate the impact of potential public policy arrangements on the security of a group of interdependent organizations, namely, airports. Focusing on security expenditures and costs to society, as assessed by a social planner, to individual airports and to attackers, we first develop a game-theoretic framework, and derive explicit Nash equilibrium and socially optimal solutions in the airports network. We then conduct numerical experiments mirroring real-world cyber scenarios, to assess how a change in interdependence impact the airports' security expenditures, the overall expected costs to society, and the fairness of security financing. Our study provides insights on the economic and policy implications for the United States, Europe, and Asia.

Original language	English
Pages (from-to)	1001-1019
Journal	Risk Analysis
Volume	40
Issue number	5
DOIs	https://doi.org/10.1111/risa.13454
Publication status	Published - 1 May 2020
Externally published	Yes

Funding

We would like to thank the participants of the Workshop of Economics of Information Security and of the Risk Analysis Society Annual Symposium for useful feedback on preliminary versions of this article, and Alessandra Tedeschi for many useful discussion on airports and air traffic management security. We also thank the anonymous reviewers for many useful suggestions that helped to greatly improve the article. Any remaining mistake is our own fault. This work has been partly funded by the European Union under the FP7 program grant 285223 (SECONOMICS) and under the H2020 program grant 830929 (CyberSec4Europe).

Funders	Funder number
Horizon 2020 Framework Programme
Seventh Framework Programme	285223, 830929
European Commission
Seventh Framework Programme

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AB - © 2020 The Authors. Risk Analysis published by Wiley Periodicals, Inc. on behalf of Society for Risk AnalysisWe study interdependent risks in security, and shed light on the economic and policy implications of increasing security interdependence in presence of reactive attackers. We investigate the impact of potential public policy arrangements on the security of a group of interdependent organizations, namely, airports. Focusing on security expenditures and costs to society, as assessed by a social planner, to individual airports and to attackers, we first develop a game-theoretic framework, and derive explicit Nash equilibrium and socially optimal solutions in the airports network. We then conduct numerical experiments mirroring real-world cyber scenarios, to assess how a change in interdependence impact the airports' security expenditures, the overall expected costs to society, and the fairness of security financing. Our study provides insights on the economic and policy implications for the United States, Europe, and Asia.

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Who Should Pay for Interdependent Risk? Policy Implications for Security Interdependence Among Airports

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