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Terrorism and Business

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  • Bruno S. Frey

Abstract

Deterrence has been a crucial element in fighting terrorism, both in politics and in rational choice analyses of terrorism. However, there are two strategies that are superior to deterrence. The first one is to make terrorist attacks less devastating and less attractive to terrorists through decentralization. The second one is to raise the opportunity cost ? rather than the material cost ? for terrorists. These alternative strategies will effectively dissuade potential terrorists. It is here argued that they not only apply to society as a whole but can also usefully be applied by business enterprises.

Suggested Citation

  • Bruno S. Frey, 2007. "Terrorism and Business," CREMA Working Paper Series 2007-12, Center for Research in Economics, Management and the Arts (CREMA).
    • Handle: RePEc:cra:wpaper:2007-12
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    References listed on IDEAS

    as
    1. Bruno S. Frey & Simon Luechinger & Alois Stutzer, 2007. "Calculating Tragedy: Assessing The Costs Of Terrorism," Journal of Economic Surveys, Wiley Blackwell, vol. 21(1), pages 1-24, February.
    2. Bruno S. Frey & Simon Luechinger & Alois Stutzer, "undated". "Valuing Public Goods: The Life Satisfaction Approach," IEW - Working Papers 184, Institute for Empirical Research in Economics - University of Zurich.
    3. Edward L. Glaeser, 2002. "The Political Economy of Hatred," Harvard Institute of Economic Research Working Papers 1970, Harvard - Institute of Economic Research.
    4. Edward L. Glaeser, 2002. "The Political Economy of Hatred," NBER Working Papers 9171, National Bureau of Economic Research, Inc.
    5. Albert Breton & Gianluigi Galeotti & Pierre Salmon & Ronald Wintrobe, 2002. "Political Extremism and Rationality," Post-Print hal-00445585, HAL.
    6. Bruno S. Frey & Dominic Rohner, 2007. "Protecting Cultural Monuments Against Terrorism," Defence and Peace Economics, Taylor & Francis Journals, vol. 18(3), pages 245-252.
    7. David Sally, 1995. "Conversation and Cooperation in Social Dilemmas," Rationality and Society, , vol. 7(1), pages 58-92, January.
    8. Dominic Rohner & Bruno Frey, 2007. "Blood and ink! The common-interest-game between terrorists and the media," Public Choice, Springer, vol. 133(1), pages 129-145, October.
    9. Alan B. Krueger & Jitka Maleckova, 2002. "Education, Poverty, Political Violence and Terrorism: Is There a Causal Connection?," NBER Working Papers 9074, National Bureau of Economic Research, Inc.
    10. Richard Kirk, 1983. "Political terrorism and the size of government: A positive institutional analysis of violent political activity," Public Choice, Springer, vol. 40(1), pages 41-52, January.
    11. repec:pri:rpdevs:krueger_maleckova_education_poverty_political.pdf is not listed on IDEAS
    12. Breton,Albert & Galeotti,Gianluigi & Salmon,Pierre & Wintrobe,Ronald (ed.), 2002. "Political Extremism and Rationality," Cambridge Books, Cambridge University Press, number 9780521804417.
    13. Glaeser, Edward L. & Shapiro, Jesse M., 2002. "Cities and Warfare: The Impact of Terrorism on Urban Form," Journal of Urban Economics, Elsevier, vol. 51(2), pages 205-224, March.
    14. repec:pri:rpdevs:krueger_maleckova_education_poverty_political is not listed on IDEAS
    15. Bruno S. Frey & Simon Luechinger, "undated". "How to Fight Terrorism: Alternatives to Deterrence," IEW - Working Papers 137, Institute for Empirical Research in Economics - University of Zurich.
    16. Bruno S. Frey & Iris Bohnet, 1999. "Social Distance and Other-Regarding Behavior in Dictator Games: Comment," American Economic Review, American Economic Association, vol. 89(1), pages 335-339, March.
    17. W. Kip Viscusi & Richard J. Zeckhauser, 2005. "Recollection Bias and the Combat of Terrorism," The Journal of Legal Studies, University of Chicago Press, vol. 34(1), pages 27-55, January.
    18. Cauley, Jon & Im, Eric Iksoon, 1988. "Intervention Policy Analysis of Skyjackings and Other Terrorist Incidents," American Economic Review, American Economic Association, vol. 78(2), pages 27-31, May.
    19. Bruno S. Frey, 2004. "Dealing with Terrorism – Stick or Carrot?," Books, Edward Elgar Publishing, number 3435.
    20. Bohnet, Iris & Frey, Bruno S., 1999. "The sound of silence in prisoner's dilemma and dictator games," Journal of Economic Behavior & Organization, Elsevier, vol. 38(1), pages 43-57, January.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Terrorism; Deterrence; Decentralization; Opportunity Cost; Business; Enterprises.;
    All these keywords.

    JEL classification:

    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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