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Security Investment in Contagious Networks

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  • Seyed Alireza Hasheminasab
  • Behrouz Tork Ladani

Abstract

Security of the systems is normally interdependent in such a way that security risks of one part affect other parts and threats spread through the vulnerable links in the network. So, the risks of the systems can be mitigated through investments in the security of interconnecting links. This article takes an innovative look at the problem of security investment of nodes on their vulnerable links in a given contagious network as a game‐theoretic model that can be applied to a variety of applications including information systems. In the proposed game model, each node computes its corresponding risk based on the value of its assets, vulnerabilities, and threats to determine the optimum level of security investments on its external links respecting its limited budget. Furthermore, direct and indirect nonlinear influences of a node's security investment on the risks of other nodes are considered. The existence and uniqueness of the game's Nash equilibrium in the proposed game are also proved. Further analysis of the model in a practical case revealed that taking advantage of the investment effects of other players, perfectly rational players (i.e., those who use the utility function of the proposed game model) make more cost‐effective decisions than selfish nonrational or semirational players.

Suggested Citation

  • Seyed Alireza Hasheminasab & Behrouz Tork Ladani, 2018. "Security Investment in Contagious Networks," Risk Analysis, John Wiley & Sons, vol. 38(8), pages 1559-1575, August.
    • Handle: RePEc:wly:riskan:v:38:y:2018:i:8:p:1559-1575
    DOI: 10.1111/risa.12966
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    References listed on IDEAS

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    Cited by:

    1. Yu Chen & Jie Hu & Weiping Zhang, 2020. "Too Connected to Fail? Evidence from a Chinese Financial Risk Spillover Network," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 28(6), pages 78-100, November.
    2. Mansooreh Ezhei & Behrouz Tork Ladani, 2020. "Interdependency Analysis in Security Investment against Strategic Attacks," Information Systems Frontiers, Springer, vol. 22(1), pages 187-201, February.

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