Equifax Data Breach Case Study

Following the Equifax data breach, the demand—the desire, willingness, and ability to pay for a good or service by consumers—for Symantec’s LifeLock identity protection services has soared, and the demand for Equifax’s similar identity protection services has dropped significantly. The relationship between the demand for a good and the price of a substitute good—a good that serves the same purpose—is usually direct: as the price of a substitute decreases, the demand for the original good also decreases. People will not be willing to pay for a good when they can purchase a similar good for much less. Equifax and Symantec provide very similar identity protection services. However, despite the fact that Symantec is charging considerably more for identity protection services than Equifax, the demand for Symantec’s services is increasing rapidly because of branding—the phenomenon where consumers are willing to pay more for a brand name they trust. …show more content…
LifeLock, a well-known substitute product, seems much safer. The benefit—what is gained from a decision—of purchasing LifeLock (the greater security compared to Equifax) outweighs the cost—what is given up when a decision is made—of purchasing LifeLock (the greater monetary expenses). Rational people will make decisions that maximize benefits and minimize costs; for many, that decision is purchasing from Symantec instead of Equifax. Cost-benefit analysis also explains why Equifax began offering services for free; the costs of millions of lawsuits greatly outweigh the lost revenue when protection services are offered for