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Proposal Number: DHSST-LRBAA14-02-CSD.14-0001-I
Proposal Title: Applying Behavioral Economics to Improve Cyber Security Behaviors: A Cyber Insurance Application
Topic Number: CSD.14
Topic Title: Cyber Security Economics
Organization: Georgia Tech Research Corp.
Address: 505 10th Street, NW
Atlanta, GA 30332-0420  
Abstract: The Georgia Institute of Technology (Georgia Tech) in collaboration with major insurance companies (e.g., AIG), propose to improve cyber security behaviors and address cyber insurance 'anomalies'--cyber insurance purchasing and marketing activities that do not produce results that are in the best interest of corporations at risk. We will use Nobel-winning behavioral-economic theories (e.g., prospect theory) to 'quantitatively' capture cyber security behaviors and to address cyber insurance anomalies. We will develop our quantitative models 'without' making simplistic assumptions (e.g., humans are rational decision makers). Our results will incentivize and assist corporate managers and insurance professionals to improve cyber security behaviors by: 1) quantitative capturing of heuristics (mental shortcuts used in making decisions) and biases that negatively influence cyber security decisions and lead to insurance anomalies, 2) assessing premiums that reflect cyber security risks and signaling the security status of the corporations to their mangers, and 3) assisting corporate managers with how to reduce the premiums and to deal with cyber insurance, similar to other types of insurance (e.g., fire prevention)--i.e., helping them to accept some amount of risk, mitigate some more risk with various technologies and procedures, and insure the rest of it. We will transition our quantitative models to working environments in the insurance sector, working with 'live' partners. We will also work with Georgia Tech Professional Education to disseminate our results by delivering new courses to industry professionals.
Award/Contract Number: FA8750-16-2-0051
Period of Performance: 02/17/2016 - 02/16/2018
Award/Contract Value: $777,010.00
Award/Obligated Amount: $777,010.00