#moral_hazard

Free exchange - How to think about moral hazard during a pandemic | Finance and economics | The Economist
▻https://www.economist.com/finance-and-economics/2020/04/25/how-to-think-about-moral-hazard-during-a-pandemic

https://www.economist.com/sites/default/files/images/print-edition/20200425_FND000_1.jpg

Economists are rightly relaxed about the risks for now

Covid-19 confronts humanity with a host of testing moral decisions. When hospital capacity is limited, which patients should get access to life-saving equipment? For how long should virus-limiting restrictions on public activity remain in place, given the immense cost of such measures? To this list, some add another: how generous should public assistance to struggling households and firms be, when such aid could encourage the abuse of state-provided safety-nets? Worries like these, concerning what social scientists call #moral_hazard, have been relatively muted during the pandemic, and appropriately so. But hard questions about risk and responsibility cannot be put off for ever.

#risque #aléa_moral et #pandémie, mais aussi #changement_climatique

ping @freakonometrics

Data breaches may cost less than the security to prevent them - TechRepublic
▻http://www.techrepublic.com/article/data-breaches-may-cost-less-than-the-security-to-prevent-them

When it comes to data breaches, 2014 was a banner year. However, if Benjamin Dean, Fellow for Internet Governance and Cyber-security, School of International and Public Affairs at Columbia University, did his math right, 2015 will be more of the same.

In a March 2015 column on The Conversation, Dean provided a hard to disagree with defense of why things security-wise “ain’t gonna change” soon. “When we examine the evidence, though, the actual expenses from the recent breaches at Sony, Target and Home Depot amount to less than 1% of each company’s annual revenues,” wrote Dean. “After reimbursement from insurance and minus tax deductions, the losses are even less.”

Dean then administered the knockout punch: “This indicates that the financial incentives for companies to invest in greater information security are low and suggests that government intervention might be needed.”

Benjamin Dean évalue le coût du vol de données à moins de 0,1% du chiffre d’affaires pour Target et encore 10 fois moins pour Home Depot.

D’où son invocation de l’#aléa_moral #moral_hazard.

Et que propose-t-il ? Ben, eueueuh… on fait un groupe de travail…

What is the answer?
Removing the moral hazard seems to be the logical answer. But how would that come about — government intervention? “It’s important to make sure the intervention doesn’t make the problem of moral hazard worse,” cautioned Dean. “This is a huge problem because as we plough billions of dollars into intelligence agencies, supposedly to keep us all safe from ’cyber-attacks’, it has the effect of further weakening the already low incentives for companies to invest in information security themselves.”

“Unintended consequences of policies, even in instances where the case for government intervention is strong, can be worse than the consequences of doing nothing at all,” further cautions Dean. “I’m not saying that we do nothing at all — just that we need verifiable and reliable data on which to begin making these complex policy decisions.”