The Ecology of Terror Defense

Nathaniel Keohane () and Richard Zeckhauser

Journal of Risk and Uncertainty, 2003, vol. 26, issue 2-3, 29 pages

Abstract: We draw on an ecological metaphor to analyze terror defense by governments and individuals. Governments can combat terror in part by targeting what we call the "stock of terror capacity" accumulated by a terrorist organization. The optimal control of terror stocks relies on both periodic cleanup and ongoing abatement, a lesson derived from the optimal control of other stocks of public bads, such as pollution. Citizens can protect themselves from terror by avoiding exposure to threats and by reducing the harm they suffer if an attack occurs--actions we call "avoidance" and "amelioration," respectively. Such measures may exert positive or negative externalities on other individuals. A simple model shows how individual responses to collective threats may undermine the effectiveness of government policies to address such threats. The model uncovers a strong analogy between the problem of individual responses to terror and the familiar congestion externality. Copyright 2003 by Kluwer Academic Publishers

Date: 2003
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