A Strategic Analysis of Terrorist Activity and Counter-Terrorism Policies

Satya Das () and Sajal Lahiri

The B.E. Journal of Theoretical Economics, 2006, vol. 6, issue 1, 30

Abstract: This paper develops a model of terrorist activity and behavior. A terrorist organization chooses the size and the number of attacks. The defending state chooses the level of security-deterrence measures. The equilibrium sequence is such that the Organization moves first, followed by the State. A defensive policy such as an innovation in security-deterrence technology tends to reduce the size of attacks but increase their number, while an offensive policy, lowering the total "strike" or "output" potential of a terrorist organization, has opposite effects. Both policies reduce the expected damage from terror. An individual's decision to become a terrorist or a financier is also modeled, leading to endogenous supplies of terrorists and funds. The effects of terrorist-flushing measures, provisions to curb the flow of funds to terrorist organizations and income-enhancing policies are evaluated by taking into account their "supply-side" effects.

Keywords: terrorism; counter-terrorism policies; security-deterrence measures; puppy dog strategy; terrorist-flushing measures (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (11)

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DOI: 10.2202/1534-598X.1295

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