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Deadly contests: An economic note on al Qaeda's reward system

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  • Raul Caruso

    ()
    (Institute of Economic Policy, Università Cattolica del Sacro Cuore, Milan)

  • Andrea Locatelli.

    ()
    (Dipartimento Politica,Istituzioni e Storia, University of Bologna)

Abstract

The article applies insights of contest theory to al Qaeda's recruitment process. Al Qaeda can be considered as a contest organizer rewarding an indivisible prize, namely, official membership and economic rewards, to candidate extremist groups. Would-be terrorists must then compete with each other to prove their commitment and ability. Candidate terrorist groups compete by maximizing their efforts to win the prize, i.e., maximizing the number of casualties. Eventually, al Qaeda reaps the benefits of the most successful attacks in the form of a huge return in terms of image, while paying a limited price. If correct, this model carries at least two important implications for counterterrorist policy. First, inasmuch as al Qaeda's main incentive to prompt competition is through spreading common knowledge about the existence of the prize, action should be undertaken to falsify and confuse the kind of information that aspirant terrorists receive. Second, because al Qaeda's reward is as much ideological as economic, efforts should be dedicated to track down and halt financial flows before they are used to reward the applicants.

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Bibliographic Info

Article provided by Economists for Peace and Security (UK) in its journal Economics of Peace and Security Journal.

Volume (Year): 3 (2008)
Issue (Month): 2 (July)
Pages: 62-67

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Handle: RePEc:uwe:journl:v:3:y:2008:i:2:p:62-67

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  1. Lerner, Josh & Tirole, Jean, 2002. "Some Simple Economics of Open," Journal of Industrial Economics, Wiley Blackwell, vol. 50(2), pages 197-234, June.
  2. Rosen, Sherwin, 1986. "Prizes and Incentives in Elimination Tournaments," American Economic Review, American Economic Association, vol. 76(4), pages 701-15, September.
  3. Moldovanu, Benny & Sela, Aner, 1999. "The Optimal Allocation of Prizes in Contests," Sonderforschungsbereich 504 Publications 99-75, Sonderforschungsbereich 504, Universität Mannheim & Sonderforschungsbereich 504, University of Mannheim.
  4. Dixit, Avinash K, 1987. "Strategic Behavior in Contests," American Economic Review, American Economic Association, vol. 77(5), pages 891-98, December.
  5. Moldovanu, Benny & Sela, Aner & Shi, Xianwen, 2005. "Contests for Status," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 139, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
  6. Arye L. Hillman & John G. Riley, 1989. "Politically Contestable Rents And Transfers," Economics and Politics, Wiley Blackwell, vol. 1(1), pages 17-39, 03.
  7. O'Keeffe, Mary & Viscusi, W Kip & Zeckhauser, Richard J, 1984. "Economic Contests: Comparative Reward Schemes," Journal of Labor Economics, University of Chicago Press, vol. 2(1), pages 27-56, January.
  8. Nti, Kofi O, 1999. " Rent-Seeking with Asymmetric Valuations," Public Choice, Springer, vol. 98(3-4), pages 415-30, March.
  9. Nti, Kofi O., 2004. "Maximum efforts in contests with asymmetric valuations," European Journal of Political Economy, Elsevier, vol. 20(4), pages 1059-1066, November.
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Cited by:
  1. Caruso, Raul, 2008. "Al Qaeda as a Tournament: Empirical Evidence," MPRA Paper 11693, University Library of Munich, Germany.
  2. Friedrich Schneider & Raul Caruso, 2011. "The (Hidden) Financial Flows of Terrorist and Transnational Crime Organizations: A Literature Review and Some Preliminary Empirical Results," Economics of Security Working Paper Series 52, DIW Berlin, German Institute for Economic Research.
  3. Caruso, Raul & Schneider, Friedrich, 2009. "Al Qaeda and Jihadist Terrorism in the Light of Contest Theory, Empirical Evidence for the period 2004-2008," MPRA Paper 15856, University Library of Munich, Germany.

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