How This Article Relates to Economic Theories:

Game of Theory:

Through the lens of game theory, the breach can be examined as a strategic interaction between a number of stakeholders, including the organization, clients, and possible attackers. Customers want to safeguard their personal information, the company wants to limit losses, and attackers try to take advantage of weaknesses in order to benefit themselves. Having a thorough understanding of each player’s motivations and strategic choices can aid in the future development of stronger cybersecurity plans.

Information Asymmetry:

Information asymmetry-related economic theories can be used to analyze this circumstance. Consumers trust the business to protect their personal information, yet a breach exposes a data gap between the two parties. In an effort to fix the imbalance and rebuild confidence, this breach notification tries to lessen information asymmetry by openly disclosing the incident, its extent, and the precautions taken to reduce risks.

How This Relates to Social Sciences Theories:

Social Contract Theory:

The breach notification is consistent with the social contract idea, which holds that people voluntarily give up some rights in return for security and safety from the state or other institutions. Customers in this instance want their data to be treated safely since they trust the organization with it. This social compact has been broken, and the notification is an admission of that fact, an apology, and a vow to work toward rebuilding the damaged trust.

Diffusion of Innovations:

The diffusion of innovations theory can be used to examine the company’s response to the data breach. In an effort to change customer and stakeholder behavior, the notification attempts to notify people about the breach and the precautions taken. Future communication methods and general cybersecurity awareness can both benefit from an understanding of the elements that influence the adoption of these security measures.