Economic Analysis of Ransomware

14 Pages Posted: 21 Mar 2017

See all articles by Julio Hernandez-Castro

Julio Hernandez-Castro

University of Kent, Canterbury

Edward Cartwright

De Montfort University

Anna Stepanova

University of Kent - Canterbury Campus

Date Written: March 20, 2017


We present in this work an economic analysis of ransomware, with relevant data from Cryptolocker, CryptoWall, TeslaCrypt and other major strands. We include a detailed study of the impact that different price discrimination strategies can have on the success of a ransomware family, examining uniform pricing, optimal price discrimination and bargaining strategies and analysing their advantages and limitations. In addition, we present results of a preliminary survey that can helps in estimating an optimal ransom value. We discuss at each stage whether the different schemes we analyse have been encountered already in existing malware, and the likelihood of them being implemented and becoming successful. We hope this work will help to gain some useful insights for predicting how ransomware may evolve in the future and be better prepared to counter its current and future threat.

Keywords: Ransomware, price discrimination, bargaining, cyber-crime

JEL Classification: K42, L12, D11, C78

Suggested Citation

Hernandez-Castro, Julio and Cartwright, Edward and Stepanova, Anna, Economic Analysis of Ransomware (March 20, 2017). Available at SSRN: or

Julio Hernandez-Castro

University of Kent, Canterbury ( email )

Keynes College
Canterbury, Kent CT2 7NP
United Kingdom

Edward Cartwright (Contact Author)

De Montfort University ( email )

The Gateway
Leicester, LE1 9BH
United Kingdom

Anna Stepanova

University of Kent - Canterbury Campus ( email )

School of Politics and International Relations
Rutherford College
Canterbury, CT2 7NX

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