Economic Impacts of Rules-based vs Risk-based Cybersecurity Regulations in Critical Infrastructure Providers

Fabio Massacci, Raminder Ruprai, Matthew Collinson, Julian Williams

Research output: Contribution to journalArticlepeer-review

9 Citations (Scopus)
95 Downloads (Pure)


What's the optimal way to regulate cybersecurity for the critical infrastructure operators in charge of electricity transmission? Should regulation follow the US style (a mostly rules-based model), the EU approach (which is mostly risk-based), or a balance of both? The authors discuss the economic issues behind making this choice and present a cybersecurity economics model for public policy in the presence of strategic attackers. They calibrated these models in the field with the support of National Grid, which operates in the UK and on the US East Coast. The model shows that optimal choices are subject to phase transitions: depending on the combination of incentives, operators will stop investing in risk assessment and only care about compliance (and vice versa). This finding suggests that different approaches might be more appropriate in different conditions and that just pushing for more rules could have unintended consequences.
Original languageEnglish
Pages (from-to)52-60
Number of pages9
JournalIEEE Security and Privacy
Issue number3
Publication statusPublished - 25 May 2016

Bibliographical note

The EU's 7th Framework Programme under grant agreement 285223 ( partially funded this work.

We thank the anonymous reviewers for their useful commentsand all the participants in the stakeholder validation meetings for their commitment and insight.


  • security
  • cybersecurity
  • regulations
  • economics
  • grid
  • infrastructure
  • privacy


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