Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/81127
Authors: 
Bartholomae, Florian W.
Year of Publication: 
2013
Series/Report no.: 
Volkswirtschaftliche Diskussionsbeiträge, Universität der Bundeswehr München, Fachgruppe für Volkswirtschaftslehre 2013,3
Abstract: 
In this paper a network model is developed in which three players sequentially choose their strategies. In the first stage, a profit-maximizing network firm chooses the price and thus the size of the network. In the second stage the consumers decide whether to join in the network or not. In the last stage a hacker has the opportunity to hack the network and cause damage to the consumer. The success of hacking is based on the protection of the customers. Whereas in the first part of the paper this is given exogenously it is endogenized later on. In an extension, the utility of the hacker as well as the consumers includes psychological costs, thus allowing some further insights. Finally, policy implications are given implying better international cooperation of the law enforcement authorities.
Subjects: 
hacking
network size
cloud computing
nonprotected consumers
JEL: 
D03
L1
L86
K4
Document Type: 
Working Paper

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