The recent study «Optimism Bias and its Impact on Cyber Risk Management Decisions» by Prof. Dr. Martin Eling and Kwangmin Jung, featured in the latest issue of the Journal of Risk Sciences, explores the impact of optimism bias on cyber risk management. The research introduces a novel model incorporating utility loss aversion, revealing that decision-makers who focus on self-protection are less likely to invest in additional cyber risk measures. It also finds that higher loss aversion correlates with reluctance to invest further in cyber risk management.
How do these findings impact our understanding of cyber risk and insurance? They offer key insights into the low demand for cyber-insurance and have significant implications for corporate risk management and public policy. The study also enhances our understanding of cyber risk events and their systemic impacts.
For detailed insights, please refer to the full article.