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ABSTRACT
The number of malicious hacking incidents in our increasingly IT-enabled world has been increasing over the years. Conventional wisdom focuses on negative impacts of these malicious hacker activities. We posit that malicious hacker activities also might lead to some unintended consequences, specifically related to altering of software market structure, and associated stakeholder consequences. In this study, we model the competition between two software platforms in the presence of malicious hackers who perform cyberattacks against one or both software platforms. We compare a benchmark case where malicious hackers are either absent, or if present do not target the software platforms, against a first scenario where only one software platform is targeted, and a second scenario where both software platforms are targeted. Interestingly, we find the presence of malicious hackers’ activities is not always detrimental to all software industry stakeholders. In general, the results suggest that the presence of malicious hackers is more likely to result in a competitive market, while their absence is more likely to result in a monopoly. Furthermore, we show that under certain market conditions, the unsecure software platform targeted by hackers potentially can drive its more secure competitor out of the market.
Supplementary material
Supplemental data for this article can be accessed on the publisher’s website.
Notes
1. https://us.norton.com/internetsecurity-emerging-threats-what-is-the-difference-between-black-white-and-grey-hat-hackers.html
2. https://cybermap.kaspersky.com/
3. https://investor.yahoo.net/releasedetail.cfm?ReleaseID=990570
5. https://www.gartner.com/newsroom/id/3859963
6. https://nvd.nist.gov/
7. https://securelist.com/exploits-how-great-is-the-threat/78125/
9. https://appleinsider.com/articles/18/03/08/survey-calls-android-buyers-more-loyal-but-more-users-are-still-switching-to-ios
10. There is one data point for Blackberry/Microsoft because of their short partnership at that time.
11. https://hackerone.com/bug-bounty-programs
12. https://nvd.nist.gov/
13. https://cve.mitre.org/
Additional information
Notes on contributors
Ravi Sen
Ravi Sen ([email protected]; corresponding author) is an Associate Professor at Mays Business School, Texas A&M. He received his Ph.D. from the University of Illinois at Urbana-Champaign. His research interests include cybersecurity, open source software, and economics of electronic commerce. Dr. Sen has published in Journal of Management Information Systems, Decision Sciences, International Journal of Electronic Commerce, Communications of AIS, and other journals.
Ajay Verma
Ajay Verma ([email protected]) is a Senior Engineer at Lockheed Martin Missiles and Fire Control, involved in innovative conceptual design of new systems. Dr. Verma received his Ph.D. from Texas A&M University. He was previously Senior Research Scientist for Knowledge Based Systems, where he was principal investigator for innovative research sponsored by Department of Defense. His research interests include simulation and modelling, dynamic analysis and control of large multi-agent complex systems, system optimization, control, and guidance of aerospace systems.
Gregory R. Heim
Gregory R. Heim ([email protected]) is the Janet and Mark H. Ely `83 Professor in the Department of Information & Operations Management, Mays Business School at Texas A&M University. He holds Ph.D. in Business Administration from the Carlson School of Management at the University of Minnesota. Dr. Heim’s research focuses on service and e-service/e-retail operations, management of technology, supply chain management, and quality management. He is a Department Editor of the Technology Management area of Journal of Operations Management and Senior Editor of Production and Operations Management.