Chapter 4: Putting Policies into Perspective
TERRORISTS’ INCENTIVES The rational choice approach used in economics can be illustrated by simple graphs. They help us to better understand the eﬀects of changes in anti-terrorist policy. The graphs represent the beneﬁts and the costs of undertaking terrorist acts from the point of view of (potential) terrorists. This allows us to analyse the extent of terrorist acts expected to occur on the basis of analytical reasoning. We ﬁrst look at the beneﬁts prospective terrorists hope to gain from their acts of terrorism. The following section focuses on the marginal costs of undertaking terrorist acts and the third section merges the two sides and identiﬁes the extent of terrorist acts expected to take place in equilibrium. What Do Terrorists Gain? Figure 4.1 depicts the total beneﬁts and marginal beneﬁts of terrorism to the prospective terrorists as a function of the extent and intensity of terrorism T. The upper part of Figure 4.1 shows that the beneﬁts received by terrorists are the greater the more terrorist acts are undertaken. But these beneﬁts do not increase in a linear way; the additional beneﬁts of additional terrorist acts are getting smaller and smaller. The reason is that terrorists ﬁrst undertake those terrorist acts producing the greatest beneﬁts. And afterwards have to choose targets promising smaller beneﬁts to them. The marginal beneﬁt curve, MB, in the lower part of the ﬁgure reﬂects the beneﬁts to terrorists of undertaking additional terrorist...
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