Terrorism & Game Theory

Summary:
Sandler and Arce M. (2003) use many different game theory models to model various terrorist related games.  The authors argue that game theory is an appropriate method for terrorism analysis for several reasons.  Although the authors offer a list of reasons for the appropriateness of terrorism related to game theory, three reasons in particular stood out to me.  One of these reasons is it is a strategic move game between terrorists and the targeted government.  Each moves in accordance to the moves the other makes.  Additionally, each actor believes themselves to be rational.  The example used was how increased use of metal detectors diverted terrorist efforts from airplane hijackings to kidnappings.  Lastly, neither side has complete information.  This unknown leads to some guesswork, ultimately leading to non-optimal results.

The authors use many examples to show that game theory is applicable to terrorism studies.  Three of these examples show basic but very important points for arguing how game theory is applicable to terrorism studies.  The first compares two entities (countries) who wish to prevent terrorist attacks on their land and spend x amount of money on terrorism prevention.  The second looks at the prisoner's dilemma and how it relates to harboring terrorists.  The last uses the United States and the European Union as an example for comparing how each could attack a terrorist group.

The authors use an example of how both the United States and the European Union wish to prevent terrorist attacks on their land.  Because both frequently do not share their spending values with one another, each is forced to guess how much the other has spent on terrorism prevention.  If one entity spends more than the other on terrorism prevention, and the terrorists can see this, the terrorists will pick the more vulnerable entity.  Even if both entities knew what the other was spending on terrorism prevention, a suboptimal result would emerge.  The entity who has less spent on terrorism prevention would increase their spending to eclipse the other, and so on and so forth until you have a large buildup of terrorism prevention.

Another example used is that of terrorism's application to the prisoner's dilemma.  Terrorist groups have to have a location by which they can set up camp.  Each country is faced with three potential options: A- do nothing against terrorism and face having terrorist attacks occur in your country, B- retaliate against the terrorists by force, or C- accommodate the terrorists in exchange for safety.  All countries do not wish to be attacked by terrorist attacks and many also do not have the power, authority, or planning to retaliate against terrorist groups.  Thus, the least optimal option (option C) for those who wish to rid the world of terrorism is most likely taken in order to protect themselves.

Lastly, another model used to represent compares the United States and the European Union.  Each entity has the option to preemptively attack against a particular terrorist group in order to eliminate them.  If both entities work together and simultaneously attack the terrorist group, the costs are low.  However, if one entity decides to attack while the other free rides of the attacking entity, the cost to the attacking entity is higher than had the entities worked together.  The same goes for the other side.  Thus, because neither entity wishes to end up attacking alone and incurring the full cost of the attack, both entities take the initiative to attack the terrorist group, and the terrorist group continues to exist. 

Critique:

I feel the authors did a good job proving how game theory is applicable to terrorism studies.  Although each terrorist group can target as many countries or entities they wish, simplifying the model down to country x and terrorist group y and how they interact can prove very valuable to country x.  It could also prove valuable to other countries as well, particularly if their security declines due to increased security for country x.   This article definitely applies to security analysis as terrorism studies are well within our realm of work.

One issue I have is the applicability of these models to actual instances.  There is great merit to designing model diagrams from things that could not otherwise be tested (personally, I would not want to run or see the results of a real life test regarding terrorism and the potential outcomes).  Much like many models found in economics and beyond, the models work well in isolation.  However, the minute you begin to add even a dozen countries the game theory model breaks down due to exponential complications of 'if's and then's'.  As stated previously, showing one, two, or even three countries could be immensely valuable to many countries, however, real life examples incorporating all participants would be just too cumbersome, if not impossible to model with so many moving parts.

Source:
Sandler, T. and Arce M., D. (2003). Terrorism & Game Theory. Simulation Gaming, 34(3), 319-337. Retrieved from http://sag.sagepub.com/content/34/3/319