Duopoly insurers’ incentives for data quality under a mandatory cyber data sharing regime
2023 (English)In: Computers & security (Print), ISSN 0167-4048, E-ISSN 1872-6208, Vol. 131, article id 103292Article in journal (Refereed) Published
Abstract [en]
We study the impact of data sharing policies on cyber insurance markets. These policies have been proposed to address the scarcity of data about cyber threats, which is essential to manage cyber risks. We propose a Cournot duopoly competition model in which two insurers choose the number of policies they offer (i.e., their production level) and also the resources they invest to ensure the quality of data regarding the cost of claims (i.e., the data quality of their production cost). We find that enacting mandatory data sharing sometimes creates situations in which at most one of the two insurers invests in data quality, whereas both insurers would invest when information sharing is not mandatory. This raises concerns about the merits of making data sharing mandatory.
Place, publisher, year, edition, pages
Elsevier Ltd , 2023. Vol. 131, article id 103292
Keywords [en]
Cournot model, Cyber insurance, Cyber risk, Data quality, Data sharing, Data reduction, Information analysis, Insurance, Competition modeling, Cournot duopoly, Cybe insurance, Cybe risk, Cyber threats, Insurance markets, Production level, Competition
National Category
Economics
Identifiers
URN: urn:nbn:se:ri:diva-64932DOI: 10.1016/j.cose.2023.103292Scopus ID: 2-s2.0-85160592819OAI: oai:DiVA.org:ri-64932DiVA, id: diva2:1766018
Note
Funding details: Stiftelsen för Strategisk Forskning, SSF, SM19-0009; Funding text 1: This research was supported by Länsförsäkringar (O. Reinert & T. Wiesinger), the Swedish Foundation for Strategic Research, grant no. SM19-0009 (U. Franke), and Digital Futures (U. Franke & C. Barreto).
2023-06-122023-06-122023-06-12Bibliographically approved