Economic theories like cost-benefit analysis and signaling theory can be applied. Cost-benefit analysis helps determine whether the cost of notifying customers outweigh the benefits of transparency and maintaining customer loyalty. Signaling theory suggest that by promptly notifying customers, the company signals its commitment to transparency and responsibility, which can enhance its reputation. Social science theories such as social contract theory and social identity theory are also relevant. Social contract theory highlights the implicit agreement between the company and its customers, where the company is expected to safeguard personal information. A breach of this contract necessities clear communication to rebuild trust. Social identity theory examines how customers’ identification with the company influences their reactions; a strong sense of belonging may lead to collective actions like support or backlash depending on the company’s response to breach.