Journal
JOURNAL OF MANAGEMENT INFORMATION SYSTEMS
Volume 25, Issue 3, Pages 337-375Publisher
ROUTLEDGE JOURNALS, TAYLOR & FRANCIS LTD
DOI: 10.2753/MIS0742-1222250310
Keywords
Bayesian revisions; conjugate prior distributions; economics of information security; information security investments; postaudit; real options; return on investment; ROC curves
Ask authors/readers for more resources
The application of real options techniques to information security is significantly different than in the case of general information technology investments due to characteristics unique to information security. Emerging research in the economics of information security has suggested real options analysis (ROA) as a potential technique for assessing the value of information security assets, but has focused primarily on the most effective level of investment and the configuration of intrusion prevention/detection systems. In this paper, we attempt to address significant gaps ill the literature by developing an integrated real options model for information security investments using Bayesian statistics that Incorporates learning and postauditing in the analysis. By using the proposed model with actual data on e-mail and Spain, we demonstrate that ROA with Bayesian postauditing offers a systematic valuation and risk management framework for evaluating information security spending by firms. We also discuss the managerial implications.
Authors
I am an author on this paper
Click your name to claim this paper and add it to your profile.
Reviews
Recommended
No Data Available