Academicians and practitioners are becoming increasingly interested in the economics of Information Technology (IT). In part, this interest stems from the increased role that IT now plays in the strategic thinking of most large organizations, and from the significant dollar costs expended by these organizations on IT. Naturally enough, researchers are turning to economics as a reference discipl...

The economics of information security has recently become a thriving and fast-moving discipline. As distributed systems are assembled from machines belonging to principals with divergent interests, incentives are becoming as important to dependability as technical design. The new field provides valuable insights not just into ‘security’ topics such as privacy, bugs, spam, and phishing, but into...

 In this paper by use of mathematical modeling of an observer [14,15] the notion of relative information functional for relative dynamical systemson compact metric spaces is presented. We extract the information function ofan ergodic dynamical system (X,T) from the relative information of T fromthe view point of observer χX, where X denotes the base space of the system.We also generalize the in...

Economics and information security should be naturally related: the former deals with the value and distribution of scarce resources, while the latter focuses on protecting and controlling valued resources. Indeed, the observation that information security should be informed by economic theory is not new. Anderson [1] and others have explicitly highlighted the relationship, which can be seen as...

The economics of information security has recently become a thriving and fast-moving discipline. As distributed systems are assembled from machines belonging to principals with divergent interests, we find that incentives are becoming as important as technical design in achieving dependability. The new field provides valuable insights not just into "security" topics (such as bugs, spam, phishin...

This chapter gives a non-technical overview of the main topics in the economics of uncertainty and information. We begin by distinguishing between uncertainty and risk and defining possible attitudes to risk. We then focus on risk-aversion and examine its role in insurance markets. The next topic is asymmetric information, that is, situations where two parties to a potential transaction do not ...

Kelly showed that if the outcome of each horse race is represented by a random variable X and gambler has some side information Y relevant to the outcome of the race, then under some condition of odds, the mutual information I(X;Y ) is the difference in growth rates of the wealth with and without side information. The side information can be considered to be a set of symbols received over a com...