Phillips, Peter J. (2005) The 'price' of terrorism. Defence and Peace Economics, 16 (6). pp. 403-414. ISSN 1024-2694
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Official URL: http://dx.doi.org/10.1080/10242690500115931
Identification Number or DOI: doi: 10.1080/10242690500115931
Abstract
Security measures are said to increase the price of terrorism. This price has not hitherto been defined in an economically meaningful way. This paper provides a precise definition by treating the terrorists' resource endowment as a parcel of contingent claims to political influence with a price equal to the summed value of those contingent claims in potential states of the world. Equipped with this definition, an equilibrium model of the price of terrorism is constructed. Important insights are gained into the effect of terrorists'risk aversion on the level of the price of terrorism in different states of the world and the theoretical conclusion reached that higher security is associated with a lower price of terrorism rather than a higher price. The implications for policy are discussed.
| Item Type: | Article (Commonwealth Reporting Category C) |
|---|---|
| Additional Information: | Deposited according to Publisher's requirements. |
| Uncontrolled Keywords: | terrorism, price of terrorism, resource endowment, contingent claims, political influence |
| Fields of Research (FOR2008): | 15 Commerce, Management, Tourism and Services > 1502 Banking, Finance and Investment > 150299 Banking, Finance and Investment not elsewhere classified 16 Studies in Human Society > 1606 Political Science > 160604 Defence Studies |
| Subjects: | 360000 Policy and Political Science > 360200 Policy and Administration > 360204 Defence Studies 350000 Commerce, Management, Tourism and Services > 350300 Banking, Finance and Investment > 350399 Banking, Finance and Investment not elsewhere classified |
| Socio-Economic Objective (SEO2008): | UNSPECIFIED |
| ID Code: | 386 |
| Deposited By: | |
| Deposited On: | 11 Oct 2007 10:20 |
| Last Modified: | 27 Feb 2012 17:44 |
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