Information Systems Frontiers
An economic mechanism for better Internet security
Decision Support Systems
The Deterrent and Displacement Effects of Information Security Enforcement: International Evidence
Journal of Management Information Systems
Choice and Chance: A Conceptual Model of Paths to Information Security Compromise
Information Systems Research
Examining user involvement in continuous software development: (a case of error reporting system)
Communications of the ACM - The Status of the P versus NP Problem
Information Security: Facilitating User Precautions Vis-à-Vis Enforcement Against Attackers
Journal of Management Information Systems
An Economic Analysis of the Software Market with a Risk-Sharing Mechanism
International Journal of Electronic Commerce
Information Systems Research
Managing Information Access in Data-Rich Enterprises with Escalation and Incentives
International Journal of Electronic Commerce
Software, vendors and reputation: an analysis of the dilemma in creating secure software
INTRUST'10 Proceedings of the Second international conference on Trusted Systems
Are markets for vulnerabilities effective?
MIS Quarterly
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Software vulnerability disclosure has become a critical area of concern for policymakers. Traditionally, a Computer Emergency Response Team (CERT) acts as an infomediary between benign identifiers (who voluntarily report vulnerability information) and software users. After verifying a reported vulnerability, CERT sends out a public advisory so that users can safeguard their systems against potential exploits. Lately, firms such as iDefense have been implementing a new market-based approach for vulnerability information. The market-based infomediary provides monetary rewards to identifiers for each vulnerability reported. The infomediary then shares this information with its client base. Using this information, clients protect themselves against potential attacks that exploit those specific vulnerabilities.The key question addressed in our paper is whether movement toward such a market-based mechanism for vulnerability disclosure leads to a better social outcome. Our analysis demonstrates that an active unregulated market-based mechanism for vulnerabilities almost always underperforms a passive CERT-type mechanism. This counterintuitive result is attributed to the market-based infomediary's incentive to leak the vulnerability information inappropriately. If a profit-maximizing firm is not allowed to (or chooses not to) leak vulnerability information, we find that social welfare improves. Even a regulated market-based mechanism performs better than a CERT-type one, but only under certain conditions. Finally, we extend our analysis and show that a proposed mechanism--federally funded social planner--always performs better than a market-based mechanism.