journal 12

Economic Theories:

  1. Cost-Benefit Analysis: The notification demonstrates cost-benefit considerations by
    alerting customers and urging protective actions. This response weighs the potential
    financial impact on the company and customers, aiming to mitigate further losses.
  2. Keynesian Economic Theory: This theory supports governmental or third-party
    intervention in cybersecurity. In this case, involving a cybersecurity firm and federal law
    enforcement underscores the importance of external assistance to stabilize trust and
    prevent further financial impact.
    Social Science Theories:
  3. Social Contract Theory: The letter reflects an implicit social contract between the
    company and customers, recognizing an obligation to inform and protect customers after
    a data breach.
  4. Risk Society Theory addresses societal responses to large-scale risks, like cybersecurity
    threats. The letter shows the company’s acknowledgment of these risks and the need to
    involve the organization and customers in minimizing potential harm.