Idea
Security comes at a cost. How much should I pay for an effective virus protection? If all my friends and neighbors buy it as well, then they are unlikely to infect me. So should I then not invest into virus protection at all? But if they all follow this line of reasoning, then none of them will buy virus protection.
The other way around, every market transaction needs to be secured. Moreover, information itself is often marketed, and this leads to new information security tasks. Music, movies and software can only be sold if they are secured; keyword searches and social network interactions are processed and sold for targeted advertising and differential pricing.
Many security problems can only be solved by economic policies, and many economic processes are in essence security processes.
Lab
Security is one of the driving forces of history: both war and diplomacy are efforts towards attaining security goals. With the advent of computers and their spreading through our work and life, computer security came into focus. Then, as computers were connected into networks, cyber security gradually emerged as a new problem area, where the old solutions didn’t seem to apply.
Cyber space is the distance-free space of costless communication. It is spanned by the modern networks, which provide end-to-end service, and make sending a message across the world feel the same as sending it across the hall. In cyber space, everyone is your neighbor. This challenges some of our communication habits, which are based on knowing that I am here, and you are there, and he is a bit further. Electronic communications shortened the distances, and computer security was already concerned with a featureless space of bitstreams. But fully deployed cyber space introduced new challenges.
Cyber space also changes our notion of computation. In a computer, computation is the process of executing programs. In a networked computer, when you run a program, it often calls programs on other computers, and they call other programs. Network computation runs out of sight, beyond the horizon. Think web search. Computation in a network is therefore not a pure artifact of programming any more, but it involves natural information processing, like life, or society. Although it still involves a lot of programming and engineering, network computation as a natural process is thus not only a subject of engineering, but also a subject of science.
Economics and security are two sides of the same coin: wealth comes with security, security with wealth. Although computer use led to many new problems in both areas, and initially these problems were tackled separately. Many security vulnerabilities, however, cannot be solved without an economic analysis, and many economic problems require security solutions.
