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A Strategic Analysis of Terrorist Activity and Counter-Terrorism Policies

Author

Listed:
  • 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.

Suggested Citation

  • Das Satya P & Lahiri Sajal, 2006. "A Strategic Analysis of Terrorist Activity and Counter-Terrorism Policies," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 6(1), pages 1-28, June.
  • Handle: RePEc:bpj:bejtec:v:topics.6:y:2006:i:1:n:6
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    Citations

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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, January.
    2. Thomas Gries & Claus-Jochen Haake, 2016. "An Economic Theory of 'Destabilization War'," Working Papers CIE 95, Paderborn University, CIE Center for International Economics.
    3. Das, Satya P., 2008. "Some mechanisms of terror cycles," Journal of Economic Behavior & Organization, Elsevier, vol. 67(3-4), pages 644-656, September.
    4. Gries, Thomas & Haake, Claus-Jochen, 2016. "An Economic Theory of 'Destabilization War' '- Compromise for Peace versus Conventional, Guerilla, or Terrorist Warfare," Annual Conference 2016 (Augsburg): Demographic Change 145617, Verein für Socialpolitik / German Economic Association.

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