Optimal model design for the cyber-insurance contract with asymmetric information

Interdependent security, correlated risks and information asymmetry are three key issues in the design of cyber-insurance contract model. In order to solve the problems in the key issues, we divide network users into high risk type and low risk type according to the security levels and propose a user risk probability model under the condition of interdependent security and correlated risks firstly. Secondly, we propose optimal cyber-insurance contract models under the condition of prior information symmetry and prior information asymmetry for the two types of users separately; we prove that the optimal cyber-insurance contract requires the full insurance in the condition of prior information symmetry and requires wantage insurance in the condition of prior information asymmetry. Finally, we verify the validity of the model by numerical examples.