The Economics of Digital Crime: Understanding the Cybercrime Value Chain

Abstract

Cybercrime has developed into a global market in which different participants supply distinct services rather than carrying out every stage of an attack themselves. The resulting division of labour links malware developers, access sellers, platform operators and financial intermediaries in arrangements that resemble commercial supply chains. This article considers the economic implications of that shift, focusing on how specialization, digital platforms and technological change shape the organization and d urability of illicit online markets. The discussion draws on Transaction Cost Economics, Platform Economy Theory and Value Chain Theory to examine how these markets are organized. It considers Initial Access Brokers, Ransomware -as-a-Service arrangements, darknet marketplaces, cryptocurrency-related laundering services and the growing use of artificial intelligence. Particular emphasis is placed on the business arrangements behind these activities: affiliate relationships, outsourced tasks, specialized suppliers and platforms that can serve many participants at once. Evidence from cybersecurity reports, threat intelligence publications and law-enforcement assessments points to a recurring economic problem: some cybercriminal operations can be initiated at a modest cost while exposing victims to much larger losses. Marketplaces also help otherwise anonymous buyers and sellers locate one another, assess counterparties and arrange transactions. AI tools may reduce the time and expertise needed for certain tasks, although their effects differ across activities and are not always straightforward to measure. The analysis therefore treats cybercrime as more than a collection of technical incidents. It is also a crossborder system of incentives, exchanges and specialized services. This perspective suggests that technical defenses are necessary but insufficient on their own: interventions must also address the markets, intermediaries and financial incentives that allow criminal operations to continue. CZU: 343.9:007.52+004.056; JEL: K42, O33, L86