Defending Multiple Terrorist Targets
نویسنده
چکیده
This paper analyzes a situation in which multiple targets are exposed to a potential terrorist threat. The probability of an attack is determined endogenously in a game theoretic model. Assuming identical targets, the first-best policy requires that the investment in deterrence should be equalized across all targets. As each target tries to divert an attack to others, the symmetric equilibrium exhibits dispersion in the level of deterrence. The first best may be achieved if the targets write a binding risk-sharing contract. Such a contract however suffers from a potential verification problem, which will be most severe when the contract involves multiple countries. JEL Classification: D74, H56.
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