|Hendel, Ulrich (September 2012): "Look like the innocent flower, but be the serpent under't": Mimicking behaviour of growth-oriented terrorist organizations. Discussion Papers in Economics 2012-20|
This paper examines the interaction between a growth-oriented terrorist organization and an uninformed government based on a two-period signaling game. The terrorists, taking into account the government's counter-terrorism response to first period attacks, gain additional manpower from successful attacks and choose their strategy to maximize the available manpower at the end of period 2. The government tries to infer the terrorist organization's size from the terrorists' attack choice it observes in period 1 and adjusts its second period counter-terrorism spending according to the perceived threat of terrorism. Combining the signaling game and organizational growth approaches of previous contributions, this paper shows that, if a terrorist group follows a growth strategy, it has an incentive to appear weaker than it is by mimicking the behaviour of a smaller organization. Furthermore, depending on its beliefs about the extent of the terrorist threat it can be optimal for a government to spend more on second period counter-terrorism measures if it is not attacked than if it were attacked. The behaviour of contemporary terrorist groups suggests that the assumptions of a growth strategy and mimicking behaviour are justified.
|Item Type:||Paper (Discussion Paper)|
|Keywords:||terrorism, counter-terrorism, game theory|
Economics > Munich Discussion Papers in Economics
|Subjects:||300 Social sciences > 300 Social sciences, sociology and anthropology|
300 Social sciences > 330 Economics
|JEL Classification:||H56, C72, D82|
|Deposited On:||15. Sep 2012 06:57|
|Last Modified:||15. Feb 2015 09:55|
9/11 Commission Report (2003), Final Report of the National Commission on Terrorist Attacks upon the United States, New York: W.W. Norton.
Abadie, A. and J. Gardeazabal (2003), The Economic Costs of Conflict: A Case Study of the Basque Country, The American Economic Review, Vol. 93, No. 1, pp. 113-132.
- (2008), Terrorism and the world economy, European Economic Review, Vol. 52, No. 1, pp. 1-27.
Arce, D. G. and T. Sandler (2005), Counterterrorism, Journal of Conflict Resolution, Vol. 49, No. 2, pp. 183-200.
- 2007), Terrorist Signalling and the Value of Intelligence, British Journal of Political Science, Vol. 37, pp. 573-586.
Becker, G. S. and Y. Rubinstein (2011), Fear and the Response to Terrorism: An Economic Analysis, Mimeo, http://www.econ.brown.edu/fac/yona_rubinstein.
Belasco, A. (2009), The Cost of Iraq, Afghanistan, and Other Global War on Terror Operations Since 9/11, Washington DC: Congressional Research Service.
Bernholz, P. (2004), Supreme values as the basis for terror, European Journal of Political Economy, Vol. 20, No. 2, pp. 317-333.
Blomberg, S. B., G. D. Hess, and A. Orphanides (2004), The macroeconomic consequences of terrorism, Journal of Monetary Economics, Vol. 51, No. 5, pp. 1007-1032.
Blomberg, S. B. and A. Mody (2005), How Severely Does Violence Deter International Investment?, Claremont McKenna College, Working Paper 2005-01.
Bloom, M. M. (2004), Palestinian Suicide Bombing: Public Support, Market Share, and Outbidding, Political Science Quarterly, Vol. 119, No. 1, pp. 61-88
Brück, T. and C. Müller (2009), Comparing the Determinants of Concern about Terrorism and Crime, DIW Berlin Discussion Paper 904.
Bundesministerium der Finanzen (2004-2012), Bundeshaushalt, http://www.bundesfinanzministerium.de/.
Bundesministerium des Inneren (2011), Statement Bundesinnenminister de Maizière zur Sicherheitslage, 01.02.2011, http://www.bmi.bund.de/SharedDocs/Pressemitteilungen.
Clauset, A., L. Heger, M. Young, and K. S. Gleditsch (2010), The strategic calculus of terrorism: Substitution and competition in the Israel-Palestine conflict, Cooperation and Conflict, Vol. 45, No. 1, pp. 6-33.
Coats, R., G. Karahan, and R. Tollison (2006), Terrorism and pork-barrel spending, Public Choice, Vol. 128, pp. 275-287.
Die Zeit (2010, November 2), Wie al-Qaida sich im Jemen eingerichtet hat, http://www.zeit.de.
Enders, W., A. Sachsida, and T. Sandler (2006), The Impact of Transnational Terrorism on U.S. Foreign Direct Investment, Political Research Quarterly, Vol. 59, No. 4, pp. 517-531.
Enders, W. and T. Sandler (1993), The Effectiveness of Antiterrorism Policies: A Vector-Autoregression-Intervention Analysis, The American Political Science Review, Vol. 87, No. 4, pp. 829-844.
- (2002), Patterns of Transnational Terrorism, 1970-1999: Alternative Time-Series Estimates, International Studies Quarterly, Vol. 46, No. 2, pp. 145-165.
Epstein, G. S. and I. N. Gang (2007), Who Is the Enemy?, Defense and Peace Economics, Vol. 18, No. 6, pp. 469-484.
Europol (2010), TE-SAT 2010: EU Terrorism Situation and Trend Report, http://www.consilium.europa.eu/uedocs/cmsUpload7TE-SAT%202010.pdf.
Feinstein, J. S. and E. H. Kaplan (2010), Analysis of a Strategic Terror Organization, Journal of Conflict Resolution, Vol. 54, No. 2, pp. 281-302.
Frey, B. S. and S. Luechinger (2003), Measuring Terrorism, Institute for Empirical Research in Economics, Working Paper, No. 171.
Frey, B. S., S. Luechinger, and A. Stutzer (2007), Calculating Tragedy: Assessing the Costs of Terrorism, Journal of Economic Surveys, Vol. 21, No. 1, pp. 1-24.
GLA Economics (2006), GLA Economics Annual Report 2006, London: Greater London Authority.
Golany, B., E. H. Kaplan, A. Marmur, and U. G. Rothblum (2009), Nature plays with dice - terrorists do not: Allocating resources to counter strategic versus probabilistic risks, European Journal of Operational Research, Vol. 192, No. 1, pp. 198-208.
Gould, E. D. and E. F. Klor (2010), Does Terrorism Work?, The Quarterly Journal of Economics, Vol. 125, No. 4, pp. 1459-1510.
Gupta, S., B. Clements, R. Bhattacharya, and S. Chakravarti (2004), Fiscal consequences of armed conflict and terrorism in low- and middle-income countries, European Journal of Political Economy, Vol. 20, No. 2, pp. 403-421.
Hoffman, B. and G. H. McCormick (2004), Terrorism, Signaling, and Suicide Attack, Studies in Conflict & Terrorism, Vol. 27, No. 4, pp. 243-281.
Karolyi, G. A. and R. Martell (2006), Terrorism and the Stock Market, Mimeo, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=823465.
Konrad, K. A. (2004), The Investment Problem in Terrorism, Economica, Vol. 71, No. 283, pp. 449-459.
Krugman, P. (2004), The costs of terrorism: What do we know?, Mimeo, http://www.l20.org/publications/9_7Q_wmd_krugman.pdf.
Kydd, A. H. and B. F. Walter (2006), The Strategies of Terrorism, International Security, Vol. 31, No. 1, pp. 49-80.
Lapan, H. E. and T. Sandler (1993), Terrorism and signalling, European Journal of Political Economy, Vol. 9, No. 3, pp. 383-397.
Mas-Colell, A., M.D. Whinston, and J.R. Green (1995), Microeconomic Theory, New York: Oxford University Press.
Mirza, D. and T. Verdier (2008), International trade, security and transnational terrorism: Theory and a survey of empirics, Journal of Comparative Economics, Vol. 36, No. 2, pp. 179-194.
National Consortium for the Study of Terrorism and Responses to Terrorism (START) (2011), Global Terrorism Database [Data file], http://www.start.umd.edu/gtd.
Overgaard, P. B. (1994), The Scale of Terrorist Attacks as a Signal of Resources, Journal of Conflict Resolution, Vol. 38, No. 3, pp. 452-478.
Penm, J., B. Buetre, and Q. T. Tran (2004), Economic costs of terrorism, abare eReport 04.8., http://184.108.40.206/data/warehouse/pe_abarebrs99001072/PC12719.pdf.
Powell, R. (2007), Defending against Terrorist Attacks with Limited Resources, American Political Science Review, Vol. 101, No. 3, p. 527.
Rohner, D. and B.S. Frey (2007), Blood and ink! The common-interest-game between terrorists and the media, Public Choice, Vol. 133, pp. 129-145.
Sandler, T. and D. G. Arce (2003), Terrorism & Game Theory, Simulation & Gaming, Vol. 34, No. 3, pp. 319-337.
Sandler, T. and K. Siqueira (2009), Games and Terrorism, Simulation & Gaming, Vol. 40, No. 2, pp. 164-192.
Schneider, F. G., T. Brück, and D. Meierrieks (2010), The Economics of Terrorism and Counter-Terrorism: A Survey (Part I and II), DIW Berlin Discussion Papers 1049 and 1050.
US Department of State (2010), Country Reports on Terrorism 2009, http://www.state.gov/documents/organization/170479.pdf.
Washington Post (2006, October 1), Two Months before 9/11, an Urgent Warning to Rice, http://www.washingtonpost.com.
Wright, L. (2006), The Looming Tower: Al-Qaeda and the Road to 9/11, New York: Knopf.