Multi-Layer Cyber-Physical Security and Resilience for Smart Grid

The smart grid is a large-scale complex system that integrates communication technologies with the physical layer operation of the energy systems. Security and resilience mechanisms by design are important to provide guarantee operations for the system. This chapter provides a layered perspective of the smart grid security and discusses game and decision theory as a tool to model the interactions among system components and the interaction between attackers and the system. We discuss game-theoretic applications and challenges in the design of cross-layer robust and resilient controller, secure network routing protocol at the data communication and networking layers, and the challenges of the information security at the management layer of the grid. The chapter will discuss the future directions of using game-theoretic tools in addressing multi-layer security issues in the smart grid.Comment: 16 page

Cyber Insurance for Cyber Resilience

Cyber insurance is a complementary mechanism to further reduce the financial impact on the systems after their effort in defending against cyber attacks and implementing resilience mechanism to maintain the system-level operator even though the attacker is already in the system. This chapter presents a review of the quantitative cyber insurance design framework that takes into account the incentives as well as the perceptual aspects of multiple parties. The design framework builds on the correlation between state-of-the-art attacker vectors and defense mechanisms. In particular, we propose the notion of residual risks to characterize the goal of cyber insurance design. By elaborating the insurer's observations necessary for the modeling of the cyber insurance contract, we make comparison between the design strategies of the insurer under scenarios with different monitoring rules. These distinct but practical scenarios give rise to the concept of the intensity of the moral hazard issue. Using the modern techniques in quantifying the risk preferences of individuals, we link the economic impacts of perception manipulation with moral hazard. With the joint design of cyber insurance design and risk perceptions, cyber resilience can be enhanced under mild assumptions on the monitoring of insurees' actions. Finally, we discuss possible extensions on the cyber insurance design framework to more sophisticated settings and the regulations to strengthen the cyber insurance markets

Towards optimal multi-objective models of network security: survey

Information security is an important aspect of a successful business today. However, financial difficulties and budget cuts create a problem of selecting appropriate security measures and keeping networked systems up and running. Economic models proposed in the literature do not address the challenging problem of security countermeasure selection. We have made a classification of security models, which can be used to harden a system in a cost effective manner based on the methodologies used. In addition, we have specified the challenges of the simplified risk assessment approaches used in the economic models and have made recommendations how the challenges can be addressed in order to support decision makers

Toward optimal multi-objective models of network security: Survey

Information security is an important aspect of a successful business today. However, financial difficulties and budget cuts create a problem of selecting appropriate security measures and keeping networked systems up and running. Economic models proposed in the literature do not address the challenging problem of security countermeasure selection. We have made a classification of security models, which can be used to harden a system in a cost effective manner based on the methodologies used. In addition, we have specified the challenges of the simplified risk assessment approaches used in the economic models and have made recommendations how the challenges can be addressed in order to support decision makers

Strategic Investment in Protection in Networked Systems

We study the incentives that agents have to invest in costly protection against cascading failures in networked systems. Applications include vaccination, computer security and airport security. Agents are connected through a network and can fail either intrinsically or as a result of the failure of a subset of their neighbors. We characterize the equilibrium based on an agent's failure probability and derive conditions under which equilibrium strategies are monotone in degree (i.e. in how connected an agent is on the network). We show that different kinds of applications (e.g. vaccination, malware, airport/EU security) lead to very different equilibrium patterns of investments in protection, with important welfare and risk implications. Our equilibrium concept is flexible enough to allow for comparative statics in terms of network properties and we show that it is also robust to the introduction of global externalities (e.g. price feedback, congestion).Comment: 32 pages, 3 figure