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Deterrence, preemption and panic: A Common-enemy problem of terrorism

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Author Info
Satya P. Das () (Indian Statistical Institute, New Delhi)
Prabal Roy Chowdhury () (Indian Statistical Institute, New Delhi)

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Abstract

We develop a game-theoretic analysis of terrorism that examines the interaction between a terrorist organization and multiple target countries, and considers both pre-emption and deterrence as counterterrorist policies. The damage from terror includes not only the material cost of fatality, injury and loss of property, but also the resultant fear. The fear-effect leads to different kinds of equilibria and implications for counter-terrorism policies. In particular, the model identifies conditions under which greater pre-emption may be the rational response to an increase in terrorism, i.e., it analyzes the merit of the dictum: "offense is the best defense." Further, it examines the characteristics of cooperative behavior among target countries in dealing with the threat of terrorism.

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Publisher Info
Paper provided by Indian Statistical Institute, New Delhi, India in its series Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers with number 08-04.

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Length: 48 pages
Date of creation: Apr 2008
Date of revision:
Handle: RePEc:ind:isipdp:08-04

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Related research
Keywords: Terrorism; Preemption; Panic; Deterrence; Cooperation; Target Countries;

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Find related papers by JEL classification:
C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances
F52 - International Economics - - International Relations and International Political Economy - - - National Security; Economic Nationalism
F53 - International Economics - - International Relations and International Political Economy - - - International Agreements and Observance; International Organizations
H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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  1. Todd Sandler & Kevin Siqueira, 2006. "Global terrorism: deterrence versus pre-emption," Canadian Journal of Economics, Canadian Economics Association, vol. 39(4), pages 1370-1387, November. [Downloadable!] (restricted)
  2. Abadie, Alberto & Gardeazabal, Javier, 2008. "Terrorism and the world economy," European Economic Review, Elsevier, vol. 52(1), pages 1-27, January. [Downloadable!] (restricted)
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  3. Alberto Abadie & Javier Gardeazabal, 2003. "The Economic Costs of Conflict: A Case Study of the Basque Country," American Economic Review, American Economic Association, vol. 93(1), pages 113-132, March. [Downloadable!]
  4. Satya Das & Sajal Lahiri, 2006. "A Strategic Analysis of Terrorist Activity and Counter-Terrorism Policies," Topics in Theoretical Economics, Berkeley Electronic Press, vol. 6(1), pages 1295-1295. [Downloadable!] (restricted)
  5. Mirza, Daniel & Verdier, Thierry, 2006. "International trade, security, and transnational terrorism : theory and empirics," Policy Research Working Paper Series 4093, The World Bank. [Downloadable!]
    Other versions:
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