Who Can We Trust?: The Economic Impact of Insider Threats

Information Systems (IS) Security has become a critical issue in the IT world. Among all threats against IS security, the insider threat is the greatest. This paper proposes a game theoretical model to study the economic impact of insider threats on IS security investments. We identify three factors influencing the optimal IS security investment: breach function sensitivity, deterrence level, and advantage rate. Our simulation results show that the optimal investment required to protect an information systems infrastructure from insiders is several magnitudes higher than for protecting against external hackers.