Describe how two different economic and social theories relate to a data breach notification.

Keynesian Economic Theory relates to the data breach notification in that a notification like this could prompt significant changes in consumer behavior. The breach could scare consumers and might require government intervention.

Classical Economic Theory tends to suggest that “the market” will sort out the potential consequences of something like a data breach. Perhaps a failure to protect customer information will cause customers to use a competitor. This consequence to allowing a breach will create a powerful incentive to secure the digital resources of customers.

Conflict Theory examines the roles of conflicts that occur in society. These primarily occur because there are limited resources which creates an inherent struggle to secure them. This can be applied as the breach is an attempt to take resources from an institution. Also, the institutions attempt to remedy the situation is to prevent the loss of resources sustained by customers, which in turn hurts the company. All of these ideas are in tension with one another.

Game theory is the study of mathematical models used to analyze the interaction between actors and predict future behavior. Game theory can be applied by the company here, as it’s attempting to predict the best possible reaction to the breach from the customer. It’s possible that withholding information from them could help the institution in the short term but if the customers find out in a different way, that could cause a more severe reaction.