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Deterrence, Preemption and Panic: A Common-Enemy Problem of Terrorism

Author

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  • Das, Satya P.
  • Roy Chowdhury, Prabal

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 counter-terrorist 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.

Suggested Citation

  • Das, Satya P. & Roy Chowdhury, Prabal, 2008. "Deterrence, Preemption and Panic: A Common-Enemy Problem of Terrorism," MPRA Paper 8223, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:8223
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    References listed on IDEAS

    as
    1. 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.
    2. Cárceles-Poveda, Eva & Tauman, Yair, 2011. "A strategic analysis of the war against transnational terrorism," Games and Economic Behavior, Elsevier, vol. 71(1), pages 49-65, January.
    3. Hausken, Kjell, 2008. "Whether to attack a terrorist's resource stock today or tomorrow," Games and Economic Behavior, Elsevier, vol. 64(2), pages 548-564, November.
    4. Mirza, Daniel & Verdier, Thierry, 2006. "International trade, security, and transnational terrorism : theory and empirics," Policy Research Working Paper Series 4093, The World Bank.
    5. 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.
    6. Gary S. Becker & Yona Rubinstein, 2011. "Fear and the Response to Terrorism: An Economic Analysis," CEP Discussion Papers dp1079, Centre for Economic Performance, LSE.
    7. Abadie, Alberto & Gardeazabal, Javier, 2008. "Terrorism and the world economy," European Economic Review, Elsevier, vol. 52(1), pages 1-27, January.
    8. repec:aph:ajpbhl:10.2105/ajph.2007.113118_1 is not listed on IDEAS
    9. 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.
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    Cited by:

    1. B. Hoyer, 2012. "Network Disruption and the Common Enemy Effect," Working Papers 12-06, Utrecht School of Economics.
    2. Garcia-Alonso, Maria D.C. & Levine, Paul & Smith, Ron, 2016. "Military aid, direct intervention and counterterrorism," European Journal of Political Economy, Elsevier, vol. 44(C), pages 112-135.
    3. Prabal Roy Chowdhury & Jaideep Roy, 2011. "Aid in times of terror," Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers 11-08, Indian Statistical Institute, New Delhi, India.

    More about this item

    JEL classification:

    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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