Applying Intermediate Microeconomics to Terrorism
32 Pages Posted: 26 Sep 2004
Date Written: August 30, 2004
The authors show how microeconomic concepts and principles are applicable to the study of terrorism. The utility maximization model provides insights into both terrorist resource allocation choices and government counterterrorism efforts, while basic game theory helps characterize the strategic interdependencies among terrorists and governments.
Keywords: Terrorism, rational choice model, income and substitution effects, Slutsky equation, game theory, prisoners' dilemma, chicken, public goods
JEL Classification: A12, A22, C70, D11, D74, H41, H56
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