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    Information Security Outsourcing with System Interdependency and Mandatory Security Requirement

    Access Status
    Fulltext not available
    Authors
    Hui, K.
    Hui, Wendy
    Yue, W.
    Date
    2013
    Type
    Journal Article
    
    Metadata
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    Citation
    Hui, Kai-Lung and Hui, Wendy and Yue, Wei T. 2013. Information Security Outsourcing with System Interdependency and Mandatory Security Requirement. Journal of Management Information Systems. 29 (3): pp. 117-156.
    Source Title
    Journal of Management Information Systems
    DOI
    10.2753/MIS0742-1222290304
    ISSN
    0742-1222
    URI
    http://hdl.handle.net/20.500.11937/31445
    Collection
    • Curtin Research Publications
    Abstract

    The rapid growth of computer networks has led to proliferation of information security standards. To meet these security standards, some organizations outsource security protection to a managed security service provider (MSSP). However, this may give rise to system interdependency risks. This paper analyzes how such system interdependency risks interact with a mandatory security requirement to affect the equilibrium behaviors of an MSSP and its clients. We show that a mandatory security requirement will increase the MSSP’s effort and motivate it to serve more clients. Although more clients can benefit from the MSSP’s protection, they are also subjected to greater system interdependency risks. Social welfare will decrease if the mandatory security requirement is high and imposing verifiability may exacerbate social welfare losses. Our results imply that recent initiatives such as issuing certification to enforce computer security protection, or encouraging auditing of managed security services, may not be advisable.

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