Terrorism and Business

Institute of Empirical Research in Economics Working Paper No. 329

22 Pages Posted: 19 Jul 2007

Date Written: July 2007


Deterrence has been a crucial element in fighting terrorism, both in politics and in rational choice analyses of terrorism. However, there are two strategies that are superior to deterrence. The first one is to make terrorist attacks less devastating and less attractive to terrorists through decentralization. The second one is to raise the opportunity cost - rather than the material cost - for terrorists. These alternative strategies will effectively dissuade potential terrorists. It is here argued that they not only apply to society as a whole but can also usefully be applied by business enterprises.

Keywords: Terrorism, Deterrence, Decentralization, Opportunity Cost, Business, Enterprises

JEL Classification: D74, H56, K42

Suggested Citation

Frey, Bruno S., Terrorism and Business (July 2007). Available at SSRN: https://ssrn.com/abstract=1001633 or http://dx.doi.org/10.2139/ssrn.1001633

Bruno S. Frey (Contact Author)

CREMA ( email )

Südstrasse 11
Zurich, CH 8008
+41 44 380 00 78 (Phone)

University of Basel ( email )

Peter Merian-Weg 6
Basel, 4002

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