The Interplay between Preemptive and Defensive Counterterrorism Measures: A Two-Stage Game
38 Pages Posted: 6 Oct 2008 Last revised: 28 Apr 2009
Date Written: April 24, 2009
A two-stage game depiction of counterterrorism is presented, where the emphasis is on the interaction between the preemptive and defensive measures taken by two targeted countries facing a common threat. The preemptor is likely to be the high-cost defender with the greater foreign interests. A prime-target country may also assume the preemptor role. The analysis identifies key factors – cost comparisons, foreign interests, targeting risks, and domestic terrorism losses – that determine counterterrorism allocations. The study shows that the market failures associated with preemptive and defensive countermeasures may be jointly ameliorated by a disadvantaged defender. Nevertheless, the subgame perfect equilibrium will still be suboptimal owing to a preemption choice that does not fully internalize the externalities.
Keywords: Transnational Terrorism, Counterterrorism, Preemption, Defense, Public Goods
JEL Classification: D62, H40
Suggested Citation: Suggested Citation