January 1, 2005

The Economics of Computer Hacking

  • Christopher Coyne

    Associate Director, F. A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics
  • Peter Leeson

    Senior Fellow, F. A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics
Key materials
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This paper considers various classes of computer hackers, with a special emphasis on fame-driven versus profit-driven hackers. The authors use simple economic analysis to examine how each of these hacking "markets" work. The resulting framework is employed to evaluate current U.S. policy aimed at reducing the threat of computer hacking and shows that this policy is largely effective. The authors consider policy adjustments consistent with the insights of the framework provided as a means of strengthening cyber security.