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Cybersecurity Investments with Nonlinear Budget Constraints: Analysis of the Marginal Expected Utilities

In: Operations Research, Engineering, and Cyber Security

Author

Listed:
  • Patrizia Daniele

    (University of Catania)

  • Antonino Maugeri

    (University of Catania)

  • Anna Nagurney

    (University of Massachusetts)

Abstract

In this paper, we consider a recently introduced cybersecurity investment supply chain game theory model consisting of retailers and consumers at demand markets with the retailers being faced with nonlinear budget constraints on their cybersecurity investments. We construct a novel reformulation of the derived variational inequality formulation of the governing Nash equilibrium conditions. The reformulation then allows us to exploit and analyze the Lagrange multipliers associated with the bounds on the product transactions and the cybersecurity levels associated with the retailers to gain insights into the economic market forces. We provide an analysis of the marginal expected transaction utilities and of the marginal expected cybersecurity investment utilities. We then establish some stability results for the financial damages associated with a cyberattack faced by the retailers. The theoretical framework is subsequently applied to numerical examples to illustrate its applicability.

Suggested Citation

  • Patrizia Daniele & Antonino Maugeri & Anna Nagurney, 2017. "Cybersecurity Investments with Nonlinear Budget Constraints: Analysis of the Marginal Expected Utilities," Springer Optimization and Its Applications, in: Nicholas J. Daras & Themistocles M. Rassias (ed.), Operations Research, Engineering, and Cyber Security, pages 117-134, Springer.
    • Handle: RePEc:spr:spochp:978-3-319-51500-7_6
    DOI: 10.1007/978-3-319-51500-7_6
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    Citations

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    Cited by:

    1. Nagurney, Anna & Dutta, Pritha, 2019. "Competition for blood donations," Omega, Elsevier, vol. 85(C), pages 103-114.
    2. Laura Scrimali, 2022. "On the Stability of Coalitions in Supply Chain Networks via Generalized Complementarity Conditions," Networks and Spatial Economics, Springer, vol. 22(2), pages 379-394, June.
    3. Gabriella Colajanni & Patrizia Daniele & Daniele Sciacca, 2022. "On the Provision of Services With UAVs in Disaster Scenarios: A Two-Stage Stochastic Approach," SN Operations Research Forum, Springer, vol. 3(1), pages 1-30, March.
    4. Colajanni, Gabriella & Daniele, Patrizia & Sciacca, Daniele, 2022. "Reagents and swab tests during the COVID-19 Pandemic: An optimized supply chain management with UAVs," Operations Research Perspectives, Elsevier, vol. 9(C).

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