Evidence of Systemic Risk from Major Cybersecurity Breaches

In general economics, “asymmetric information” refers to information about a transaction in which one party knows more than another party, to the potential benefit of the former at the expense of the latter. An example often occurs when consumers and a business are counter-parties in consumption transactions. Consumers commonly rely on companies to safeguard their personal and company-specific data used in the transaction without explicitly knowing the internal safeguards and standards placed by the data-holding company on their data protection infrastructure (Moore, 2010).

In theory, the risk to corporate reputation and the prospect of breach-related legal judgments and … Read more