Is There a Cost to Privacy Breaches? an Event Study

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Provided by: Carnegie Mellon University
Topic: Security
Format: PDF
While the literature on information security economics has begun to investigate the stock market impact of security breaches and vulnerability announcements, little more than anecdotal evidence exists on the effects of privacy breaches. In this paper the authors present the first comprehensive analysis of the impact of a company's privacy incidents on its market value. They compile a broad data set of instances of exposure of personal information due to failures of some security mechanism (hacking, stolen or lost equipment, poor data handling processes, and others) and they present the results of various empirical analyses, including event study analysis.
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