The economics of cybersecurity: balancing investment and systemic risk

Abstract

This paper explores the intersection of cybersecurity and modern economic theory. The study analyzes the Investment Paradox using the Gordon-Loeb model, emphasizing that cybersecurity is not merely a technical expense but a strategic capital investment. Furthermore, it addresses the systemic risks posed to global financial stability and the growing labor market gap in the IT security sector. The purpose of this work is to demonstrate how rational economic actors balance the costs of defense against the catastrophic risks of digital insecurity.