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

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  • Dwight Lee
  • Todd Sandler

Abstract

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

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    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. 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.
    3. 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.
    4. Sandler, Todd & Tschirhart, John T. & Cauley, Jon, 1983. "A Theoretical Analysis of Transnational Terrorism," American Political Science Review, Cambridge University Press, vol. 77(1), pages 36-54, March.
    5. 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.
    6. Todd Sandler & John L. Scott, 1987. "Terrorist Success in Hostage-Taking Incidents," Journal of Conflict Resolution, Peace Science Society (International), vol. 31(1), pages 35-53, March.
    7. Cornes, Richard & Sandler, Todd, 1984. "Easy Riders, Joint Production, and Public Goods," Economic Journal, Royal Economic Society, vol. 94(375), pages 580-598, September.
    8. Sandler, Todd & Lapan, Harvey E., 1988. "The Calculus of Dissent: An Analysis of Terrorists' Choice of Targets," Staff General Research Papers Archive 10818, Iowa State University, Department of Economics.
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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. Rupayan Gupta, 2010. "Structuring international institutions for the efficient provisioning of global security," Public Choice, Springer, vol. 144(1), pages 169-197, July.
    3. Gil Epstein & Ira Gang, 2007. "Who Is The Enemy?," Defence and Peace Economics, Taylor & Francis Journals, vol. 18(6), pages 469-484.
    4. Bruno S. Frey & Simon Luechinger, 2005. "Measuring terrorism," Chapters, in: Alain Marciano & Jean-Michel Josselin (ed.), Law and the State, chapter 6, Edward Elgar Publishing.
    5. 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.
    6. Bruno S. Frey & Simon Luechinger, "undated". "Terrorism: Deterrence May Backfire," IEW - Working Papers 136, Institute for Empirical Research in Economics - University of Zurich.
    7. 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.
    8. Rupayan Gupta, 2014. "Changing threat perceptions and the efficient provisioning of international security," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 47(4), pages 1312-1341, November.
    9. Gupta, Rupayan, 2010. "Changing Threat Perceptions and the Efficient Provisioning of International Security," MPRA Paper 24016, University Library of Munich, Germany.
    10. Jean-Paul Azam, 2005. "Suicide-bombing as inter-generational investment," Public Choice, Springer, vol. 122(1), pages 177-198, January.
    11. Andre Rossi de Oliveira & Emilson Caputo Delfino Silva, 2021. "Self-Enforcing Collective Counterterror Retaliation," Games, MDPI, vol. 13(1), pages 1-16, December.
    12. Kevin Siqueira & Todd Sandler, 2010. "Terrorist networks, support, and delegation," Public Choice, Springer, vol. 142(1), pages 237-253, January.

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