Mis-spending on information security measures: Theory and experimental evidence

Abstract

Information resources are becoming increasingly important to individuals and organizations, and ensuring their security is a major concern. While research in information security has adopted primarily a quantitative method to determine how and how much to invest in security, most decision makers rely on non-quantitative methods for this purpose, thereby introducing a considerable amount of as yet unexplained subjective judgment to the problem. We use a behavioral decision making approach to investigate factors causing possible inefficiencies of security spending decisions. Decision makers in our experiment performed a series of economic games featuring the key characteristics of a typical security problem. We found several biases in investment decisions. For budgeting their investment between major classes of security measures, decision makers demonstrated a strong bias toward investing in preventive measures rather than in detection and response measures, even though the task was designed to yield the same return on investment for both classes of measures. We term this phenomenon the “Prevention Bias.” Decision makers also reacted to security threats when the risk was so small that no investment was economically justified. For higher levels of risk that warranted some security investment, decision makers showed a strong tendency to overinvest. Theoretical and practical implications of the findings are discussed.