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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 1-30, June.
    • Handle: RePEc:bpj:bejtec:v:topics.6:y:2006:i:1:n:6
    DOI: 10.2202/1534-598X.1295
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    Citations

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    Cited by:

    1. Subhayu Bandyopadhyay & Todd Sandler, 2023. "The Trade-Offs of Counterterrorism Policies," Review, Federal Reserve Bank of St. Louis, vol. 105(3), pages 177-197, July.
    2. Satya P. Das & Prabal Roy Chowdhury, 2008. "Deterrence, preemption and panic: A Common-enemy problem of terrorism," Discussion Papers 08-04, Indian Statistical Institute, Delhi.
    3. Nicola, Brugali & Paolo, Buonanno & Mario, Gilli, 2018. "Political Regimes and the Determinants of Terrorism and Counter-terrorism," Working Papers 384, University of Milano-Bicocca, Department of Economics, revised 13 Jul 2018.
    4. 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.
    5. Satya P. Das & Sajal Lahiri, 2021. "Why direct counter‐terrorism measures only may fail: An analysis of direct and preventive counter‐terrorism measures," International Journal of Economic Theory, The International Society for Economic Theory, vol. 17(4), pages 416-445, December.
    6. Mario Gilli & Paolo Tedeschi, 2020. "European Union and Transnational Terrorism. A Normative Analysis of Strategic Spillovers," Working Papers 437, University of Milano-Bicocca, Department of Economics, revised Mar 2020.
    7. Thomas Gries & Claus-Jochen Haake, 2016. "An Economic Theory of 'Destabilization War'," Working Papers CIE 95, Paderborn University, CIE Center for International Economics.
    8. Hamid Mohtadi & Bryan S. Weber, 2021. "Catastrophe And Rational Policy: Case Of National Security," Economic Inquiry, Western Economic Association International, vol. 59(1), pages 140-161, January.
    9. Gries, Thomas & Haake, Claus-Jochen, 2016. "An Economic Theory of 'Destabilization War' '- Compromise for Peace versus Conventional, Guerilla, or Terrorist Warfare," VfS Annual Conference 2016 (Augsburg): Demographic Change 145617, Verein für Socialpolitik / German Economic Association.
    10. Das, Satya P., 2008. "Some mechanisms of terror cycles," Journal of Economic Behavior & Organization, Elsevier, vol. 67(3-4), pages 644-656, September.

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