On the optimal retaliation against terrorists: The paid-rider option
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
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- 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.
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- Lapan, Harvey E. & Sandler, Todd, 1988. "To Bargain or Not to Bargain: That is the Question," Staff General Research Papers 10817, Iowa State University, Department of Economics.
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- 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.
- Cornes, Richard & Sandler, Todd, 1984. "Easy Riders, Joint Production, and Public Goods," Economic Journal, Royal Economic Society, vol. 94(375), pages 580-98, September.
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