THE ECONOMICS OF SECURITY

Traditionally, security has been understood in terms of technological advances. This paper argues that security is a subjective concept, and that problems of security can best be understood using simple economic concepts. Economics offers a wide range of tools and models to understand individual actors ’ decisions about security and the interaction that takes place during the emergence of a collective decision. Once security problems are understood as problems of resource allocation and incentives, behaviours usually characterised as perverse can be readily explained