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A Strategic Analysis of Terrorist Activity and Counter-Terrorism Policies

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  • Das Satya P

    ()
    (Indian Statistical Institute, Delhi)

  • Lahiri Sajal

    ()
    (Southern Illinois University Carbondale)

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.

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Bibliographic Info

Article provided by De Gruyter in its journal The B.E. Journal of Theoretical Economics.

Volume (Year): 6 (2006)
Issue (Month): 1 (June)
Pages: 1-28

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Handle: RePEc:bpj:bejtec:v:topics.6:y:2006:i:1:n:6

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Cited by:
  1. Satya P. Das & Prabal Roy Chowdhury, 2014. "Deterrence, Preemption, And Panic: A Common-Enemy Problem Of Terrorism," Economic Inquiry, Western Economic Association International, vol. 52(1), pages 219-238, 01.
  2. Das, Satya P., 2008. "Some mechanisms of terror cycles," Journal of Economic Behavior & Organization, Elsevier, vol. 67(3-4), pages 644-656, September.

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