Externality and Cyber-Security Breaches Mathematics & Economics Essay (Essay Sample)

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Externality and Cyber-Security Breaches
The externality is the spillover impact of the production or consumption of the product that is not reflected in the cost of that product. An externality can also be defined as the benefit or cost that have either a positive or negative impact on a party who never choose to benefit or incur a cost. For instance, the production of steel leads to pollution of air though the cost of the pollution is not mirrored in the price of steel. In this paper, I will discuss an externality that I have personally witnessed in the past 12 months. One of the externalities I have witnessed personally concerns cybersecurity breaches (Paganini). With economic activity progressively depending on networked computer systems, cyber security breaches continue drawing focus at the highest levels of non-profit organizations, industries, and government. Cybersecurity breaches impose costs to businesses and consumers (Gal-Or, Anindya, 200). Cyber security breaches are costing consumers billions. There are various ways where individuals pay for cyber security breaches. Consumers pay for it in theft like theft of service, financial theft, and information theft. People also pay for it in productivity loss, when they experience minor inconveniences and when network stop functioning (Camp, Stephen, 21). Consumers pay for it when they purchase security products and services to minimize the above two losses. In short, people have been paying for the lack of security in the past year.