when reading the Passage that you provided I think Economic Theories

Cost-Benefit Analysis: Firms weigh the cost of notification to customers and loss of trust against benefits to compliance and legal requirements.
Labor Market Demand: The bigger the breach, the bigger the demand for skilled cybersecurity experts, again raising wages and competitiveness in the labor market.
Social Science Theories:

Social Contract Theory: Security breaches are a betrayal of the faith and confidence that customers have placed in organizations, which must be rectified through transparency and notifications.
Risk Perception Theory: Customer reactions to breach notifications depend on their perception of the risk from identity theft that might affect future interactions.