Data breaches happen to thousands of companies a day. There is no discrimination between each company as data breaches can happen to large or small organizations. In addition to data being stolen, there are some social and economic theories that tie into data breaches that give insight into how a company handles a data breach when it occurs.
Data Breach Letter, Economic, and Social Theories
The classic economic theory relates to ideals of supply and demand. A customer that signs up for an account and accepts the terms of agreement is supplying their information to a company. The company must then secure this data because there is a high demand for hackers to get this data and distribute it on hacker forums to make a profit.
The rational choice theory relates to perspective to have best interest in mind. Companies have to make rational choices when a data breach occurs. A wrong choice could lead to a potential lawsuit that could cost the company millions of dollars in addition to the breach that occurred.
The social exchange theory relates to the cost and benefits of customer or business actions. The company has to weight the cost and benefits of telling the customer of a data breach that has occurred. The customer may distrust the company and take their business somewhere else.
The social influence theory relates to influencing one’s choices through suggestions. To keep the trust of customers, a company will issue suggestions to the customer when a data breach occurs. For example, the breached company may tell the customer to call their bank to issue a new debit or credit card that was involved in the breach. This influences the customer to take action as well and keep trust in the company.
References
Montana Department of Justice. (2020). Sample Data Breach Notification Notice of Data Breach. Retrieved April 4, 2023, from https://www.dojmt.gov/wp-content/uploads/Glasswasherparts.com_.pdf
