Pay-as-you-go or data sharing? Optimal cybersecurity investment for connected vehicle platforms and manufacturers

Purpose The rapid development of connected vehicle technologies has significantly enhanced the intelligence of the automotive industry, but it has also introduced critical cybersecurity challenges. Given the significant impact on society, Internet of Vehicles (IoV) platforms and manufacturers are increasingly investing in security, supported by government subsidies. This paper aims to model the strategic interactions among the government, the IoV platform and the manufacturer, specifically analyzing how optimal government subsidy policies influence cybersecurity investment decisions. Design/methodology/approach This paper develops a Stackelberg game model to analyze the impact of government subsidies on the strategic cybersecurity investment decisions of the IoV platform and the manufacturer under two business models: pay-as-you-go and data sharing. Findings This study demonstrates that government subsidies yield a triple-win by improving cybersecurity levels, profits, and consumer surplus of the platform across both business models. Specifically, consumer surplus is augmented by increased subsidies, cybersecurity attack probability and risk sensitivity, but is mitigated by rising technical service costs. Besides, the research highlights a critical link between subsidy and pricing model selection of the IoV platform. Originality/value This study identifies the optimal efficiency of government subsidies in boosting cybersecurity investment and determines the optimal service business model between manufacturers and IoV platforms. These findings provide decision-making guidance and a theoretical foundation for governments and industry stakeholders in the safe development of the IoV and intelligent vehicle sectors.