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Terrorism and Counterterrorism: History Dependence, Spillovers and Coordination Failures

37 Pages Posted: 6 Oct 2013  

João Ricardo Faria

University of Texas - Pan American - College of Business Administration - Department of Economics & Finance

Emilson Caputo Delfino Silva

University of Alberta - Department of Marketing, Business Economics & Law

Daniel G. Arce

University of Texas at Dallas - Department of Economics & Finance

Date Written: September 17, 2013

Abstract

This paper is the first systematic examination of (counter)terrorism dynamic games with two types of externalities: temporal and spatial. We consider two types of non-cooperative behavior; one in which national authorities are sensitive with respect to the spatial spillovers of counterterror policy and another in which they are insensitive. We show that in the steady state intertemporal policy considerations outweigh considerations typically associated with transnational counterterror policy. That is, temporal externalities tend to outweigh spatial externalities. This then feeds into policy recommendations as to when nations should coordinate transnational counterterror policy and when policy should be spatially (in)sensitive.

Keywords: History-Dependent Preferences, Terrorism, Counterterrorism, Spatial Spillovers, Intertemporal Spillovers, Coordination Failures

JEL Classification: H87, H23, D74, C79, F59

Suggested Citation

Faria, João Ricardo and Delfino Silva, Emilson Caputo and Arce, Daniel G., Terrorism and Counterterrorism: History Dependence, Spillovers and Coordination Failures (September 17, 2013). University of Alberta School of Business Research Paper No. 2013-1313. Available at SSRN: https://ssrn.com/abstract=2336192 or http://dx.doi.org/10.2139/ssrn.2336192

Joao Ricardo Faria

University of Texas - Pan American - College of Business Administration - Department of Economics & Finance ( email )

1201 W. University Drive
Edinburg, TX 78539-2999
United States

Emilson Caputo Delfino Silva (Contact Author)

University of Alberta - Department of Marketing, Business Economics & Law ( email )

Edmonton, Alberta T6G 2R6
Canada

Daniel G. Arce

University of Texas at Dallas - Department of Economics & Finance ( email )

Richardson, TX 75083
United States

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