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On the optimal retaliation against terrorists: The paid-rider option


  • Dwight Lee
  • Todd Sandler


We examine whether nations, faced with the threat of terrorism, will be motivated to engage in the efficient amount of retaliation against terrorists. We demonstrate that the problem confronting the efforts of nations to achieve an optimal retaliation against terrorists is understated by the traditional free-rider analysis. In particular, nations have the option of actually selling or reducing the public good of retaliation, provided through the efforts of others, by offering safe havens to terrorists in return for the terrorists' pledge to attack elsewhere. This paid-rider behavior is also shown to apply to other public good scenarios. Copyright Kluwer Academic Publishers 1989

Suggested Citation

  • Dwight Lee & Todd Sandler, 1989. "On the optimal retaliation against terrorists: The paid-rider option," Public Choice, Springer, vol. 61(2), pages 141-152, May.
  • Handle: RePEc:kap:pubcho:v:61:y:1989:i:2:p:141-152
    DOI: 10.1007/BF00115660

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    References listed on IDEAS

    1. Atkinson, Scott E & Sandler, Todd & Tschirhart, John, 1987. "Terrorism in a Bargaining Framework," Journal of Law and Economics, University of Chicago Press, vol. 30(1), pages 1-21, April.
    2. Lapan, Harvey E & Sandler, Todd, 1988. "To Bargain or Not to Bargain: That Is the Question," American Economic Review, American Economic Association, vol. 78(2), pages 16-21, May.
    3. Cornes, Richard & Sandler, Todd, 1984. "Easy Riders, Joint Production, and Public Goods," Economic Journal, Royal Economic Society, vol. 94(375), pages 580-598, September.
    4. Landes, William M, 1978. "An Economic Study of U.S. Aircraft Hijacking, 1961-1976," Journal of Law and Economics, University of Chicago Press, vol. 21(1), pages 1-31, April.
    5. repec:cup:apsrev:v:77:y:1983:i:01:p:36-54_24 is not listed on IDEAS
    6. 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.
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    Cited by:

    1. Gil Epstein & Ira Gang, 2007. "Understanding the development of fundamentalism," Public Choice, Springer, vol. 132(3), pages 257-271, September.
    2. Gil Epstein & Ira Gang, 2007. "Who Is The Enemy?," Defence and Peace Economics, Taylor & Francis Journals, vol. 18(6), pages 469-484.
    3. Bruno S. Frey & Simon Luechinger, 2005. "Measuring terrorism," Chapters,in: Law and the State, chapter 6 Edward Elgar Publishing.
    4. Isard Walter & Anderton Charles H., 1999. "Survey of the Peace Economics Literature: Recent Key Contributions and a Comprehensive Coverage Up to 1992 (Part II)," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 5(4), pages 1-55, October.

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