Terrorists' equilibrium choices when no attack method is riskless

Phillips, Peter J. (2011) Terrorists' equilibrium choices when no attack method is riskless. Atlantic Economic Journal, 39 (2). pp. 129-141. ISSN 0197-4254


This paper builds on Phillips (Defence and Peace Economics, 16(6), 403–414, 2009) and enhances the NM expected utility analysis of terroristic behaviour by drawing on the fact that expected utility maximising behaviour in a setting where a terroristic group makes optimal decisions from a choice set containing combinations of attack methods can be analysed in terms of two moments (mean and variance) of the random payoffs associated with each attack method combination. This paper presents an equilibrium relationship between the expected payoffs of attack method combinations and the risk associated with those payoffs. This is an equilibrium model of choice under uncertainty when the behaviour of interest is the selection by a terroristic group of an optimal decision from a choice set containing attack method combinations.

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Item Type: Article (Commonwealth Reporting Category C)
Refereed: Yes
Item Status: Live Archive
Additional Information: Submitted version deposited in accordance with the copyright policy of the publisher.
Faculty/School / Institute/Centre: Historic - Faculty of Business and Law - School of Accounting, Economics and Finance
Date Deposited: 03 Feb 2011 05:25
Last Modified: 17 Oct 2014 02:52
Uncontrolled Keywords: expected utility; terrorism; mean-variance; equilibrium
Fields of Research : 17 Psychology and Cognitive Sciences > 1702 Cognitive Sciences > 170202 Decision Making
22 Philosophy and Religious Studies > 2203 Philosophy > 220302 Decision Theory
14 Economics > 1401 Economic Theory > 140104 Microeconomic Theory
Socio-Economic Objective: A Defence > 81 Defence > 8101 Defence > 810107 National Security
Identification Number or DOI: 10.1007/s11293-010-9253-z
URI: http://eprints.usq.edu.au/id/eprint/18218

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