Interdependency Analysis in Security Investment against Strategic Attacks

Information security investment is of high importance in management of IT infrastructure. There are many researches focused on game theoretical modeling and analysis of security investment of interdependent firms against potential security attacks. However, these studies usually are not concerned with dynamic and strategic nature of attacks which are increasingly important features of today’s cyber systems. Strategic attackers are those who are able to substitute their investments among targets over time by shifting investments towards poorly protected targets in order to obtain more potential financial gains. In this paper we try to analyze the effects of interdependency in security investment of firms against strategic attackers. Note that although there are a limited number of works that consider the strategic nature of attack, they model the defenders as a set of isolated nodes. Hence the positive externality caused by interconnection of the firms is not considered in these models. We consider both the attackers’ actual strategic behaviors (that causes negative externality via the possibility of substituting the target) as well as structural effects of the networked firms (that leads to positive externality via attack propagation). We propose a differential game among the networked firms in which attackers act strategically. In the proposed game, by employing a linear substitution model for characterizing the process of target selection by the attacker, the open-loop Nash solutions are highlighted in an analytical form. The analytical results show how interconnectivity between firms and the strategic behavior of the attacker determines the firms’ incentives for security investment. It is shown that overinvestment or underinvestment could occur depending on the degree of interdependency among the given firms. Accordingly we designed mechanisms to encourage the firms to invest at a socially optimal level. The achieved results in this paper helps security designers to better formulate their policies in tackling strategic attackers.