Journal Entry (Module 11) CYSE201S

Describe how two different economics theories and two different social sciences
theories relate to the letter.

Economic Theories

1. Asymmetric Information Theory: This theory states that in a transaction, one party (the seller) most often has more information than the buyer.
2. Signaling Theory: This theory suggests that in situations of uncertainty, one party sends signals to the other to establish credibility.

Social Science

1. Social Contract Theory: This theory proposes that people follow social rules and norms in exchange for the benefits of living in a society.
2. Social Identity Theory: This theory suggests that people identify with groups and strive for a positive group image.

Asymmetric information theory relates to how customers were unaware of the security risk, while signaling theory relates to how the company’s response aims to rebuild trust. Social contract theory relates to the broken trust due to compromised security, and social identity theory relates to how the data breach might negatively impact the company’s reputation.