Socially efficient detection of terror plots

Edward H. Kaplan

Oxford Economic Papers, 2015, vol. 67, issue 1, 104-115

Abstract: How many good guys are needed to find the bad guys? To answer this question, a staffing model is developed to determine the number of agents required to detect a specified fraction of terror attacks assuming that the hazard functions governing attack and plot detection are proportional. Given estimates of the benefit of preventing a terror attack and the cost of counterterror agents, the staffing model can be employed to determine both the socially efficient terror plot detection level and the implied number of counterterror agents. A game-theoretic version of the model emerges if strategic terrorists select their attack rate presuming that the state will respond optimally. Numerical examples are presented to illustrate potential applications using empirical estimates of the benefit of preventing attacks and the cost of counterterror agents.

Date: 2015
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