Title: On Game-Theoretic Risk Management (Part Three) - Modeling and Applications,
Abstract: The game-theoretic risk management framework put forth in the precursor
reports "Towards a Theory of Games with Payoffs that are
Probability-Distributions" (arXiv:1506.07368 [q-fin.EC]) and "Algorithms to
Compute Nash-Equilibria in Games with Distributions as Payoffs"
(arXiv:1511.08591v1 [q-fin.EC]) is herein concluded by discussing how to
integrate the previously developed theory into risk management processes. To
this end, we discuss how loss models (primarily but not exclusively
non-parametric) can be constructed from data. Furthermore, hints are given on
how a meaningful game theoretic model can be set up, and how it can be used in
various stages of the ISO 27000 risk management process. Examples related to
advanced persistent threats and social engineering are given. We conclude by a
discussion on the meaning and practical use of (mixed) Nash equilibria
equilibria for risk management.