Assessing the Utility of Signaling Theory to Understand the Practices of Stolen Data Markets

• In Event: IASOC Presents: Organized Crime Actors and Illicit Markets in Cyberspace

Abstract

Over the last decade, research on the problem of mass data breaches and on-line markets where personal information is sold has expanded. Studies from computer science and criminology demonstrate that information buyers face a great deal of risk from unscrupulous vendors operating in faceless environments where little information can be gathered about the quality of their products or their overall ability to be trusted. This study considers the value of Gambetta's signaling theory to understand the ways that participants in on-line stolen data markets demonstrate their ability to be trusted due to information asymmetry. Using a sample of advertisements from Russian and English-language data forums, we developed zero-inflated Poisson regression models and find that data sellers may influence their likelihood of receiving feedback by specifying the type of payment mechanism, choosing the advertisement language, and selecting the type of market they operate within. The implications of this analysis for our knowledge of illicit markets and signalling theory are considered in detail.

Authors

• Thomas J. Holt, Michigan State University

• Olga Smirnova, Eastern Carolina University

• Alice Hutchings, University of Cambridge