Economics of Cyber Security

This course explores how economic principles can be applied to cybersecurity decision-making, including investment strategies, risk management, and adversarial behavior in cybercrime ecosystems.

Instructor: Abhishta Abhishta

Term: Q1

Location: University of Twente

Time: TBA

Course Overview

This course focuses on the intersection of economics and cybersecurity. It equips students with tools to make informed, data-driven decisions about security investments and policies.

Cybersecurity is not only a technical challenge but also an economic one—organisations must balance risks, costs, and incentives in an environment shaped by adversarial actors.

Students will:

  • Understand economic models of cyber risk and attacker behavior
  • Analyse trade-offs in cybersecurity investment decisions
  • Explore cybercrime markets such as ransomware and DDoS ecosystems
  • Apply data-driven approaches to evaluate security strategies
  • Study real-world cyber incidents and organisational responses

Prerequisites

  • Basic understanding of information systems or cybersecurity
  • Introductory knowledge of statistics or economics

Assessment

  • Assignment(s): Data-driven analysis of cybersecurity problems
  • Final project or case study
  • Participation

Teaching Approach

The course combines:

  • Lectures on theoretical foundations
  • Empirical case studies based on real-world cyber incidents
  • Data-driven analysis using large-scale datasets
  • Discussions on policy and organisational decision-making

Schedule

Week Date Topic Materials
1 Introduction to Cybersecurity Economics

Overview of cyber risk, incentives, and economic thinking in security.
2 Cost-Benefit Analysis of Security Investments

Trade-offs between security spending and organisational objectives.
3 Risk Modelling and Decision-Making

Quantitative approaches to cyber risk assessment.
4 Adversarial Behaviour and Incentives

Understanding attacker motivations and economic models of cybercrime.
5 Markets for Cybercrime

Ransomware, DDoS-for-hire, and underground economies.
6 Regulation and Policy

Role of policy, compliance, and governance in cybersecurity.
7 Case Studies in Cyber Incidents

Real-world analysis of cyber attacks and their economic impact.
8 Data-Driven Security Decision-Making

Using empirical data and measurements to guide security strategy.