2007 40th Annual Hawaii International Conference on System Sciences (HICSS'07) (2007)
Big Island, Hawaii
Jan. 3, 2007 to Jan. 6, 2007
Arunabha Mukhopadhyay , Indian Institute of Management Calcutta, India
Binay Bhushan , Indian Institute of Management Calcutta, India
Debashis Saha , Indian Institute of Management Calcutta, India
Ambuj Mahanti , Indian Institute of Management Calcutta, India
e-business organizations are under constant threat of their business being disrupted by hackers, viruses and a host of malicious attackers. This would lead to loses to the tune of millions. To ensure self- protection, they spend millions of dollars on firewalls, anti-virus, intrusion detection systems, digital signature and encryption. Nonetheless, a new virus or a clever hacker can easily compromise these deterrents. Organizations should resort to self e-risk insurance as a supplementary mechanism to reduce these individual financial losses. We propose in this paper two option modes for self- e-risk insurance, for hedging e-risk. The first is an exchange traded model, comprising of a long asset, long put and short call. The second is an over the counter model using a long call.
e-commerce, security breach, e-risk, option model, self-insurance.
B. Bhushan, D. Saha, A. Mahanti and A. Mukhopadhyay, "E-Risk Management through Self Insurance: An Option Model," 2007 40th Annual Hawaii International Conference on System Sciences (HICSS'07)(HICSS), Big Island, Hawaii, 2007, pp. 158b.