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Towards econometric estimation of the cost of cyber conflict
Swedish Defence University, Department of Systems Science for Defence and Security, Systems Science for Defence and Security Division. Department of Computer Science, Karlstad University, Karlstad, Sweden .ORCID iD: 0009-0008-2442-4058
Swedish Defence University, Department of Systems Science for Defence and Security, Systems Science for Defence and Security Division.ORCID iD: 0000-0002-4376-9800
2024 (English)In: Procedia Computer Science, E-ISSN 1877-0509, Vol. 246, p. 2635-2644Article in journal (Refereed) Published
Abstract [en]

In the modern era, understanding the costs and implications of conflict extends beyond traditional kinetic boundaries into the cyber realm. While economic analysis has historically been concerned primarily with the state’s ability to sustain and engage in physical warfare, recent research has begun to quantify the additional societal and collateral costs. To shed light on the total costs of the use of cyber weapons and capabilities, we argue that a comprehensive analysis must be done using econometric tools. This paper describes two important tools in this toolkit, counterfactual analysis and bottom-up accounting, in the context of cyber conflict. It discusses how significant collateral costs manifest in the inadvertent aftermath of vulnerability stockpiling for use in cyber weapons, coupled with the losses and thefts of these resources. Such incidents represent not only a direct financial burden but also erode the trust and goodwill of nations who do not disclose the discovered vulnerabilities. Finally, multiple data sources and bottom-up accounting techniques are used to conduct a case study estimating the aggregate societal cost of cyber conflict in the Ukrainian war between late 2013 and 2020. The aggregate cost of the 76 recorded cyberattacks is estimated to be approximately $160M. Finally, counterfactual analysis is concluded to face significant data availability challenges preventing high quality synthesis of the two methods described.

Place, publisher, year, edition, pages
Amsterdam: Elsevier, 2024. Vol. 246, p. 2635-2644
Keywords [en]
cyber security, cyber conflict, cyber collateral damage, applied econometrics, offensive cyber operations
National Category
Information Systems
Research subject
Systems science for defence and security
Identifiers
URN: urn:nbn:se:fhs:diva-13263DOI: 10.1016/j.procs.2024.09.434OAI: oai:DiVA.org:fhs-13263DiVA, id: diva2:1917028
Conference
28th International Conference on Knowledge Based and Intelligent information and Engineering Systems (KES 2024), Seville, September 11-13, 2024
Available from: 2024-11-29 Created: 2024-11-29 Last updated: 2024-11-29Bibliographically approved

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Sigholm, Johan

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