Economics of Conflict and Terrorism

A special issue of Games (ISSN 2073-4336). This special issue belongs to the section "Applied Game Theory".

Deadline for manuscript submissions: closed (1 December 2021) | Viewed by 24850

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Special Issue Editors


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Guest Editor
Department of Economics, Florida Atlantic University, Boca Raton, FL, USA
Interests: macroeconomics; development economics; economics of entrepreneurship; economics of terrorism and conflict; economics of education

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Co-Guest Editor
Economics Program, University of Texas at Dallas, Richardson, TX 75080, USA
Interests: game theory; collective action; conflict; counter(terrorism); cybersecurity

Special Issue Information

Dear Colleagues,

Terrorism is the intentional use (or threat of use) of violence against civilians or inactive military personnel in order to influence an audience beyond the immediate victims for the purpose of achieving political, ideological, or religious goals. Thus, terrorism is itself a strategy, as is counterterrorism. This engenders a situation of mutual interdependence that lends itself to game-theoretic analysis for the purposes of gaining insight into terror activities and counterterror policies. The same can be said for other forms of conflict, including civil war, genocide, insurgency, and guerilla warfare.

This Special Issue is devoted to contributions that focus on the economics of conflict and terrorism. Applications can be widespread and may include theoretical and applied papers on issues related to counterterrorism, domestic terrorism, transnational terrorism, externalities, terror cycles, alliances, coalitions, value of intelligence, cyberterrorism, signaling, civil wars, refugees, violent manifestations, and organized crime.

Prof. Dr. Joao Ricardo Faria
Prof. Dr. Daniel Arce
Guest Editors

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Keywords

  • Differential games
  • International public goods
  • Externalities
  • Counterterrorism 
  • Terrorism recruitment
  • National security
  • Homeland security
  • Civil War
  • Genocide
  • Cyberterrorism

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Published Papers (8 papers)

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Editorial

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2 pages, 151 KiB  
Editorial
A Preface for the Special Issue “Economics of Conflict and Terrorism”
by João Ricardo Faria and Daniel Arce
Games 2022, 13(2), 29; https://doi.org/10.3390/g13020029 - 1 Apr 2022
Viewed by 1869
Abstract
The current Special Issue presents an interesting collection of seven articles that expand the existing literature on the subjects of terrorism and conflict [...] Full article
(This article belongs to the Special Issue Economics of Conflict and Terrorism)

Research

Jump to: Editorial

12 pages, 1729 KiB  
Article
Conflicts with Momentum
by James W. Boudreau, Timothy Mathews, Shane D. Sanders and Aniruddha Bagchi
Games 2022, 13(1), 12; https://doi.org/10.3390/g13010012 - 19 Jan 2022
Cited by 3 | Viewed by 3087
Abstract
Take the fort, then take the city. In a two-stage, two-party contest, victory in the initial stage can provide an advantage in the final stage. We examine such momentum in conflict scenarios and investigate how valuable it must be to avoid a [...] Read more.
Take the fort, then take the city. In a two-stage, two-party contest, victory in the initial stage can provide an advantage in the final stage. We examine such momentum in conflict scenarios and investigate how valuable it must be to avoid a Pyrrhic victory. Our main finding is that although the elasticity of effort—which we allow to vary between the two stages—does impact the contestants’ effort levels, it has no bearing on the endogenously determined value of momentum itself. Further, rent dissipation in the two-stage conflict is equal across party whether or not an individual obtains first-stage momentum. Thus, momentum helps a player solely by enhancing marginal ability for victory in the second-stage contest. It does not, however, change the player’s net calculus of second-stage contest spending. Such contestable advantage is also found to be more rent-dissipative than innate/uncontestable advantage. Therefore, Pyrrhic victories should be more common for contests with an intermediate stage or stages in which advantages can be earned, ceteris paribus. While intermediate targets appear as useful conflict benchmarks, they dissipate additional expected contest rents. This additional rent-dissipative toll exists even for backward-inductive equilibrium behavior in a complete information setting. Whereas the quagmire theory suggests parties can become involved in problematic conflicts due to incomplete information, the present paper finds that the setting of conflict—namely, contestable intermediate advantage—can alternatively generate rent-dissipative tolls. Similarly, contestable advantage can lead parties to optimally forego contest participation (i.e., if conflict parameters do not meet the participation constraint). This is in contrast to a one-stage simultaneous contest with second-stage parametric values of the present contest. Full article
(This article belongs to the Special Issue Economics of Conflict and Terrorism)
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16 pages, 1419 KiB  
Article
Self-Enforcing Collective Counterterror Retaliation
by Andre Rossi de Oliveira and Emilson Caputo Delfino Silva
Games 2022, 13(1), 1; https://doi.org/10.3390/g13010001 - 21 Dec 2021
Cited by 1 | Viewed by 2255
Abstract
Motivated by recent examples of collective effort on the war on terror, we examine the incentives that retaliation may produce for the endogenous formation of an international counterterror coalition. We show that there are quite reasonable circumstances under which any nation that is [...] Read more.
Motivated by recent examples of collective effort on the war on terror, we examine the incentives that retaliation may produce for the endogenous formation of an international counterterror coalition. We show that there are quite reasonable circumstances under which any nation that is a target of a terrorist attack finds it desirable to be a member of the international counterterror coalition, holding the choices of all other nations as given. The incentives to join the coalition are the group-specific benefits from retaliation enjoyed by each coalition member, the relatively lower spillover benefit from retaliation enjoyed by each stand-alone nation, and the inability of pre-emptive measures to avert terrorist attacks. The disincentive to join is the anticipated backlash from retaliation, which targets coalition members only. Full article
(This article belongs to the Special Issue Economics of Conflict and Terrorism)
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15 pages, 1868 KiB  
Article
The Hybridisation of Conflict: A Prospect Theoretic Analysis
by Pieter Balcaen, Cind Du Bois and Caroline Buts
Games 2021, 12(4), 81; https://doi.org/10.3390/g12040081 - 26 Oct 2021
Cited by 4 | Viewed by 3410
Abstract
Revisionist actors are increasingly operationalising a broad number of non-violent threats in their quest to change the status quo, popularly described as hybrid conflict. From a defensive point of view, this proliferation of threats compels nations to make difficult choices in terms of [...] Read more.
Revisionist actors are increasingly operationalising a broad number of non-violent threats in their quest to change the status quo, popularly described as hybrid conflict. From a defensive point of view, this proliferation of threats compels nations to make difficult choices in terms of force posture and composition. We examine the choice process associated with this contemporary form of state competition by modelling the interactions between two actors, i.e., a defender and a challenger. As these choices are characterised by a high degree of uncertainty, we study the choice from the framework of prospect theory. This behavioural–economic perspective indicates that the defender will give a higher weight and a higher subjective value to conventional threats, inducing a higher vulnerability in the domain of hybrid deterrence. As future conflict will increasingly involve choice dilemmas, we must balance threats according to their probability of occurrence and their consequences. This article raises awareness regarding our cognitive biases when making these choices. Full article
(This article belongs to the Special Issue Economics of Conflict and Terrorism)
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20 pages, 1014 KiB  
Article
Validating Game-Theoretic Models of Terrorism: Insights from Machine Learning
by James T. Bang, Atin Basuchoudhary and Aniruddha Mitra
Games 2021, 12(3), 54; https://doi.org/10.3390/g12030054 - 30 Jun 2021
Cited by 2 | Viewed by 3708
Abstract
There are many competing game-theoretic analyses of terrorism. Most of these models suggest nonlinear relationships between terror attacks and some variable of interest. However, to date, there have been very few attempts to empirically sift between competing models of terrorism or identify nonlinear [...] Read more.
There are many competing game-theoretic analyses of terrorism. Most of these models suggest nonlinear relationships between terror attacks and some variable of interest. However, to date, there have been very few attempts to empirically sift between competing models of terrorism or identify nonlinear patterns. We suggest that machine learning can be an effective way of undertaking both. This feature can help build more salient game-theoretic models to help us understand and prevent terrorism. Full article
(This article belongs to the Special Issue Economics of Conflict and Terrorism)
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11 pages, 322 KiB  
Article
Algorithm for Computing Approximate Nash Equilibrium in Continuous Games with Application to Continuous Blotto
by Sam Ganzfried
Games 2021, 12(2), 47; https://doi.org/10.3390/g12020047 - 1 Jun 2021
Cited by 7 | Viewed by 3831
Abstract
Successful algorithms have been developed for computing Nash equilibrium in a variety of finite game classes. However, solving continuous games—in which the pure strategy space is (potentially uncountably) infinite—is far more challenging. Nonetheless, many real-world domains have continuous action spaces, e.g., where actions [...] Read more.
Successful algorithms have been developed for computing Nash equilibrium in a variety of finite game classes. However, solving continuous games—in which the pure strategy space is (potentially uncountably) infinite—is far more challenging. Nonetheless, many real-world domains have continuous action spaces, e.g., where actions refer to an amount of time, money, or other resource that is naturally modeled as being real-valued as opposed to integral. We present a new algorithm for approximating Nash equilibrium strategies in continuous games. In addition to two-player zero-sum games, our algorithm also applies to multiplayer games and games with imperfect information. We experiment with our algorithm on a continuous imperfect-information Blotto game, in which two players distribute resources over multiple battlefields. Blotto games have frequently been used to model national security scenarios and have also been applied to electoral competition and auction theory. Experiments show that our algorithm is able to quickly compute close approximations of Nash equilibrium strategies for this game. Full article
(This article belongs to the Special Issue Economics of Conflict and Terrorism)
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11 pages, 300 KiB  
Article
The Path of Terror Attacks
by João Ricardo Faria and Daniel Arce
Games 2021, 12(2), 35; https://doi.org/10.3390/g12020035 - 13 Apr 2021
Cited by 1 | Viewed by 2446
Abstract
This paper derives a dynamic path of ongoing terror attacks as a function of terrorists’ capacity and a target government’s counterterror capacity. The analysis provides several novel insights and characterizations. First, the effect of counterterror policy is limited. Second, proactive counterterror policy affects [...] Read more.
This paper derives a dynamic path of ongoing terror attacks as a function of terrorists’ capacity and a target government’s counterterror capacity. The analysis provides several novel insights and characterizations. First, the effect of counterterror policy is limited. Second, proactive counterterror policy affects the depreciation (fatigue) of terrorists’ capacity, and defensive counterterror policy limits the worst-case scenario. Third, fluctuations in the time path of attacks are a function of terrorists’ time preferences and adjustment costs of changing tactics, which are policy invariant. Indeed, in our model, the oscillations of terror attacks occur irrespective of the government’s counterterror stance. Fourth, collective action inefficiencies associated with the underprovision of proactive counterterror policies and overprovision of defensive ones are further exacerbated by our finding that proactive counterterror policy is the more effective of the two. Hence, the more effective policy is underprovided. Full article
(This article belongs to the Special Issue Economics of Conflict and Terrorism)
18 pages, 353 KiB  
Article
EU Demand for Defense, 1990–2019: A Strategic Spatial Approach
by Justin George and Todd Sandler
Games 2021, 12(1), 13; https://doi.org/10.3390/g12010013 - 1 Feb 2021
Cited by 17 | Viewed by 2805
Abstract
For 1990–2019, this study presents two-step GMM estimates of EU members’ demands for defense spending based on alternative spatial-weight matrices. In particular, EU spatial connectivity is tied to EU membership status, members’ contiguity, contiguity and power projection, inverse distance, and arms trade. At [...] Read more.
For 1990–2019, this study presents two-step GMM estimates of EU members’ demands for defense spending based on alternative spatial-weight matrices. In particular, EU spatial connectivity is tied to EU membership status, members’ contiguity, contiguity and power projection, inverse distance, and arms trade. At a Nash equilibrium, our EU demand equations are derived explicitly from a spatially based game-theoretical model of alliances. Myriad spatial linkages among EU members provide a robust free-riding finding, which differs from the spatial and non-spatial literature on EU defense spending. Even though the EU applies common trade policies and allows for unrestricted labor movement among members, members’ defense responses adhered to those of a defense alliance. Moreover, EU defense spending exhibits positive responses to GDP and transnational terrorist attacks, and a negative response to population. During the sample period, EU members did not view Russia as a military threat. Full article
(This article belongs to the Special Issue Economics of Conflict and Terrorism)
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