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Consider again the original Markov chain model for the cyber risk level from the beginning of the question. Besides looking at the costs of cybercrime
Consider again the original Markov chain model for the cyber risk level from the beginning of the question. Besides looking at the costs of cybercrime the firm is also interested in how many quarters they can expect to experience a cybercrime event. They assume the event of experiencing a cybercrime event in any given quarter of a year
has probability given by respectively and when the cyber risk level is respec tively low, medium and high in that quarter,
is given the cyber risk level in that quarter, conditionally independent of what has happened in previous quarters.
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