A jump-diffusion approach to modelling software security investment

We present a model in which the investment in software countermeasure system is at the same time uncertain of costs and benefits from maintenance system and diminish cyber attacks under jump-diffusion process, and needs investment time using the real options approach. The software security depends upon the time it takes to receive benefiting from the system once the decision to invest has been taken. The model account for uncertainty both in the unexpected events security defect and benefits from diminish attacking damage associated with the investment opportunity. Unexpected events such as new security threat are included into the models as Poisson jump processes. The practical significance of the paper is the application of the model to approximate the continuous time the value security investment, resulting in an easy to use decision aid for managers.