The WiKID Blog

Viewing posts from January, 2009

georgian-kangaroos-protected-by-dhs

Posted by: admin 15 years, 8 months ago

For those of you who think Georgia is filled with nothing but lead-poisoned moonshine drinkers and has torn down everything worth preserving (well, I think Sherman started the trend) and therefore would not be worthy of federal funds from DHS, I ask you: What about our Kangaroos?

infosec-and-the-affect-heuristic

Posted by: admin 15 years, 8 months ago

Perhaps there is a lesson for infosec professionals in this post on the Affect heuristic on Overcoming Bias:

Suppose an airport must decide whether to spend money to purchase some new equipment, while critics argue that the money should be spent on other aspects of airport safety. Slovic et. al. (2002) presented two groups of subjects with the arguments for and against purchasing the equipment, with a response scale ranging from 0 (would not support at all) to 20 (very strong support). One group saw the measure described as saving 150 lives. The other group saw the measure described as saving 98% of 150 lives. The hypothesis motivating the experiment was that saving 150 lives sounds vaguely good - is that a lot? a little? - while saving 98% of something is clearly very good because 98% is so close to the upper bound of the percentage scale. Lo and behold, saving 150 lives had mean support of 10.4, while saving 98% of 150 lives had mean support of 13.6.

The post also shows that people tend to over-estimate the value of going with known brands, even though they might not add any extra value:

Ganzach (2001) found the same effect in the realm of finance. According to ordinary economic theory, return and risk should correlate positively - or to put it another way, people pay a premium price for safe investments, which lowers the return; stocks deliver higher returns than bonds, but have correspondingly greater risk. When judging familiar stocks, analysts' judgments of risks and returns were positively correlated, as conventionally predicted. But when judging unfamiliar stocks, analysts tended to judge the stocks as if they were generally good or generally bad - low risk and high returns, or high risk and low returns.

But perhaps you don't have time to consider all this, because you've got a deadline!

Finucane et. al. also found that time pressure greatly increased the inverse relationship between perceived risk and perceived benefit, consistent with the general finding that time pressure, poor information, or distraction all increase the dominance of perceptual heuristics over analytic deliberation.

isp-issues

Posted by: admin 15 years, 8 months ago

We're currently having some ISP issues. This is affecting in-bound email and access to the test WiKID server and extranet. You can still download the server and vwmare images. Sorry for any inconvenience.

downtime-expected

Posted by: admin 15 years, 8 months ago

We're moving offices tomorrow (9/11/08) and expect to have some downtime while we migrate the servers. We will be down from 2:00 PM to 6:00 PM EDT. Thanks for your patience. This will affect mail and the certificate servers.

does-mandatory-disclosure-provide-an-incentive-to

Posted by: admin 15 years, 8 months ago

I was googling around when I came across an interesting paper Information as regulation : the effect of Community Right to Know laws on toxic emissions. I think that this paper has interesting similarities to the current state of affairs for breach notification laws. Consider the background:

In 1986, the American Congress voted the Emergency Planning and Community Right to Know Act. This law requires manufacturing companies in the United States with 10 or more employees to publicly disclose the quantity and type of toxic chemicals released into the environment. In July 1988, the Environmental Protection Agency published the first reports for toxic emissions in the calendar year 1987. Data from these reports have constituted the Toxic Release Inventory (TRI). And finally, in June 1989, the TRI was disclosed to the public for the first time. As a result, publicly traded firms whose TRI releases were first reported had to cope with negative abnormal market returns, i.e. a significant drop of their stock price. The paper examines how firms responded to this negative stock price information.

I also liked the reasoning for examining stock price changes:

Actually, there are two main reasons explaining why TRI announcements reduce firm value. First, a high and unexpected TRI announcement can be considered by investors as a warning of poor management practices and increased risk of spills or accidents. Second, TRI emissions disclosures can create a form of pressure from sensitive stakeholders : “green” consumers who may decide to boycott products of high polluting companies, ecologist groups who can sue the firm and, last but not least, the government who might target these firms for wider inspections. All of these mean high pollution-related expenditures (e.g. for penalties or new abatement equipment and methods) that will reduce the firm future profits. Consequently, investors get rid of their shares and the stock price decreases. This stock price hit is a strong incentive for the company executives to improve environmental performance and strengthen firm value in following years.

And I thought the conclusions were

On the average, the 130 firms mentioned in the media had a -0.299 % negative abnormal return on the day of the TRI disclosure, while it was -0.019 % the day before. The 40 firms with the largest negative stock price effects following announcement of their TRI emissions were found :

• to be among the top 1/3 of polluting firms (per dollar revenue) in their industries.
• not to be the largest absolute TRI emitters, which is consistent with the hypothesis that the market reacted more to unexpected TRI disclosures than to those that were already expected to be very large.
• to subsequently reduce their TRI emissions more than other firms in their industry (including those firms with the largest TRI/ $ revenue prior to the disclosure of TRI levels).
• to also make other significant attempts at improving their environmental performance by reducing the number and severity of oil and chemical spills.
• to have a lower chance of receiving higher fines from the government in subsequent years.

These results clearly show that new and unanticipated information concerning a firm’s toxic emissions that has a significant impact on market valuation is a strong incentive for that firm to reduce subsequent emissions and to otherwise improve its environmental performance. From this point of view, providing information to the public may therefore be an effective remedy to reduce environmental externalities beyond a regulatory standard.

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