Affiliation:
1. 1Indian Statistical Institute, Delhi, das@isid.ac.in
2. 2Southern Illinois University Carbondale, lahiri@siu.edu
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.
Subject
General Economics, Econometrics and Finance
Cited by
9 articles.
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