A BEJTE Topics article.

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.

Submitted: March 8, 2006 · Accepted: April 22, 2006 · Published: June 19, 2006

Originally published in Topics in Theoretical Economics.

Recommended Citation

Das, Satya P. and Lahiri, Sajal (2006) "A Strategic Analysis of Terrorist Activity and Counter-Terrorism Policies," Topics in Theoretical Economics: Vol. 6 : Iss. 1, Article 6.
Available at: http://www.bepress.com/bejte/topics/vol6/iss1/art6