Abstract

In an era of increasing digitization and reliance on digital technologies, the economic implications of cybersecurity have become a critical concern for firms across various sectors. This thesis provides a review of the existing literature on firms’ decisions to invest in cybersecurity. This study aims to provide insights into the factors driving firms to enhance
their cybersecurity measures by analyzing the economic rationale behind cybersecurity investments. There is not a lot that has been done in this particular topic, this thesis, building on the existing literature aims to provide more knowledge. The model in this thesis explores the decision of firms to invest in cybersecurity, considering factors such as substitutability of products (cybersecurity), consumer preferences for security, and the benefits of cybersecurity investments. Through a comprehensive review of the economics of cybersecurity investments, this thesis provides a better understanding of the economic motivations and implications behind firms’ decisions to invest in cybersecurity in today’s digital landscape.