Terrorism and its oxygen: a game-theoretic perspective on terrorism and the media

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<ul><li><p>This article was downloaded by: [UQ Library]On: 13 November 2014, At: 06:00Publisher: RoutledgeInforma Ltd Registered in England and Wales Registered Number: 1072954 Registeredoffice: Mortimer House, 37-41 Mortimer Street, London W1T 3JH, UK</p><p>Behavioral Sciences of Terrorism andPolitical AggressionPublication details, including instructions for authors andsubscription information:http://www.tandfonline.com/loi/rirt20</p><p>Terrorism and its oxygen: a game-theoretic perspective on terrorism andthe mediaChristoph P. Pfeiffer aa Department of Economics , University of the Federal ArmedForces , Hamburg , GermanyPublished online: 25 Jul 2011.</p><p>To cite this article: Christoph P. Pfeiffer (2012) Terrorism and its oxygen: a game-theoreticperspective on terrorism and the media, Behavioral Sciences of Terrorism and Political Aggression,4:3, 212-228, DOI: 10.1080/19434472.2011.594629</p><p>To link to this article: http://dx.doi.org/10.1080/19434472.2011.594629</p><p>PLEASE SCROLL DOWN FOR ARTICLE</p><p>Taylor &amp; Francis makes every effort to ensure the accuracy of all the information (theContent) contained in the publications on our platform. However, Taylor &amp; Francis,our agents, and our licensors make no representations or warranties whatsoever as tothe accuracy, completeness, or suitability for any purpose of the Content. Any opinionsand views expressed in this publication are the opinions and views of the authors,and are not the views of or endorsed by Taylor &amp; Francis. The accuracy of the Contentshould not be relied upon and should be independently verified with primary sourcesof information. Taylor and Francis shall not be liable for any losses, actions, claims,proceedings, demands, costs, expenses, damages, and other liabilities whatsoever orhowsoever caused arising directly or indirectly in connection with, in relation to or arisingout of the use of the Content.</p><p>This article may be used for research, teaching, and private study purposes. Anysubstantial or systematic reproduction, redistribution, reselling, loan, sub-licensing,systematic supply, or distribution in any form to anyone is expressly forbidden. Terms &amp;Conditions of access and use can be found at http://www.tandfonline.com/page/terms-and-conditions</p><p>http://www.tandfonline.com/loi/rirt20http://www.tandfonline.com/action/showCitFormats?doi=10.1080/19434472.2011.594629http://dx.doi.org/10.1080/19434472.2011.594629http://www.tandfonline.com/page/terms-and-conditionshttp://www.tandfonline.com/page/terms-and-conditions</p></li><li><p>Terrorism and its oxygen: a game-theoretic perspective onterrorism and the media</p><p>Christoph P. Pfeiffer</p><p>Department of Economics, University of the Federal Armed Forces, Hamburg, Germany</p><p>(Received 3 January 2011; final version received 2 June 2011)</p><p>The symbiotic relationship between terrorism and the media is widely taken as self-evident; theoretical analysis from an economic perspective is rare. In this paper, agame-theoretic model with two players the media and a terrorist organization isdeveloped and then extended to multiple terrorist groups. The number of terroristgroups is first modeled exogenously and then, in a market entry game,endogenously. It can be shown that media attention not only encouragesterrorism, but also has a stabilizing effect. With increasing terrorism and constantmedia preferences, the probability that a single terrorist incident is reported ondiminishes, reducing the expected payoff from a successful terrorist attack.Hence, terrorist attacks of a single group are declining in the overall number ofterrorist groups. Predictions are made about which circumstances encouragemarket entry of terrorist groups. It is found that religiousness, popular supportand, inversely, the national income of the base country, will, ceteris paribus,lead to an increase in potential terrorist groups engaging in terrorism.</p><p>Keywords: terrorism; media; game theory; economics</p><p>The only thing we have to fear is fear itself. (Franklin Roosevelt)</p><p>Introduction</p><p>After the terrorist attacks on 11 September 2001 and the subsequent war on terror, ter-rorism received increased attention from all sides of social science. Economics was noexception. With its focus on preferences and individual choice, economic analysisbegins with identifying terrorists motivation.</p><p>Terrorism can be seen as a special form of political participation, which is ultimatelyaimed at the redistribution of power, property rights and the extortion of rents (Frey &amp;Luechinger, 2002). Schelling (1991) argues that the main tactical goals of internationalterrorism are</p><p>(1) gaining publicity and media attention;(2) destabilizing the existing policy; and(3) damaging the economies of targeted countries.</p><p>ISSN 1943-4472 print/ISSN 1943-4480 online</p><p># 2012 Society for Terrorism Researchhttp://dx.doi.org/10.1080/19434472.2011.594629http://www.tandfonline.com</p><p>Email: christophpp@gmail.com</p><p>Behavioral Sciences of Terrorism and Political AggressionVol. 4, No. 3, September 2012, 212228</p><p>Dow</p><p>nloa</p><p>ded </p><p>by [</p><p>UQ</p><p> Lib</p><p>rary</p><p>] at</p><p> 06:</p><p>00 1</p><p>3 N</p><p>ovem</p><p>ber </p><p>2014</p></li><li><p>Becker (1968) was the first to analyze criminal behavior in a rational choice frame-work. He argues that criminals respond to incentives just as any other individual andcan be deterred by a higher probability or a greater severity of punishment. With agiven punishment, the probability of capture has to be just high enough to render theexpected net benefit of the crime negative in order to deter criminals.</p><p>The assumption of rationality is essential to economic models. However, the degree ofrationality imposed on economic agents varies. While Mises (1949, 2007) defines humanaction as always rational, the rationality assumption usually rests on further conditions.Rationality in a still relatively thin sense implies that individuals behave consistentlyaccording to their preferences and respond to price changes. Conditions for rationality ina thicker sense include a neither altruistic nor malevolent utility function (narrow self-inter-est), expectations about the future that are correct on average (rational expectations) orknowledge about other individuals utility functions (common knowledge of rationality).</p><p>Rational choice models have been criticized as unrealistic (e.g. Sen, 1977).Examples of individuals not behaving in accordance with the homo economicushypothesis abound; in experiments and in real life, individuals often violate basic prop-erties of rationality (Klein, 2001; Selten, 1991). The idea of bounded rationality can beseen as an attempt to reconcile descriptive and normative decision theory (Gigerenzer&amp; Selten, 2001). While optimization under time and information constraints runs intosimilar theoretical problems as unbounded optimization, Todd (2001) argues that fastand frugal heuristics often produce decisions that are surprisingly close to the optimum.</p><p>How accurate is the rationality hypothesis with respect to terrorism? In order toevaluate terrorists rationality, it is useful to distinguish between different kinds of ter-rorists. Terrorists face different levels of risk exposure, ranging from a sympathizerconfronted with little risk to the suicide bomber facing death almost certainly(Caplan, 2006). Iannaccone (2006) points out that the ex-ante risk of an individualjoining a terrorist organization is probably comparable to that of a person joining thearmed forces; only when assigned certain tasks does the risk increase substantially.</p><p>Following Olsons (1971) theory of collective action, a terrorist organization can beseen as a club (e.g. Berman, 2009; Iannaccone, 2006). Olson (1971) points out that clubmembers have an incentive to free ride off other members contributions. The collectiveaction problem consists of aligning individual rationality with the clubs goals. Becauseof the (extremely) high expected costs involved in conducting terrorist attacks, movingmembers to action is particularly difficult for terrorist organizations. Therefore, the questionabout terrorists rationality leads to a question about incentives: how are terrorists induced tocarry out dangerous tasks? Standard strategies include demonizing the enemy and estab-lishing a sense of moral conviction and strong camaraderie among the terrorists. Therational sacrifice perspective, on the other hand, focuses on immaterial and materialrewards terrorists or their families receive before and after the mission (Iannaccone, 2006).</p><p>Suicide terrorism while from the terrorist organizations point of view a highlyeffective weapon (Pape, 2003; see also Berman &amp; Laitin, 2005) seems to be particularlyantithetic to rationality. How can a person who sacrifices her own life be rational andself-interested? Harrison (2006) explains this apparent paradox by describing suicide terror-ism as a trade of life for the identity of a living martyr. Azam (2005) argues that suicideterrorism is an intergenerational investment. Caplan (2006) concludes that aligningsuicide terrorism with the notion of rationality is probably only possible when includingevolutionary aspects of self-interest as put forward by Dawkins (1976/2006). Overall,while not all terrorists adhere to narrow self-interest, there is empirical evidence that terroristorganizations respond to price changes, such as target hardening or better security measures</p><p>Behavioral Sciences of Terrorism and Political Aggression 213</p><p>Dow</p><p>nloa</p><p>ded </p><p>by [</p><p>UQ</p><p> Lib</p><p>rary</p><p>] at</p><p> 06:</p><p>00 1</p><p>3 N</p><p>ovem</p><p>ber </p><p>2014</p></li><li><p>(Berman &amp; Laitin, 2005; Enders &amp; Sandler, 1993; Sandler &amp; Siqueira, 2006), renderingBeckarian deterrence and other means of shaping terrorists incentives viable (for an exten-sive review of the economics of (counter-)terrorism see also Schneider, Bruck &amp; Meierieks2010a, 2010b). With reference to the analysis of conflict, Schelling (1960/1980) argues inthe defense of the rationality assumption:</p><p>[W]e seriously restrict ourselves by the assumption of rational behavior not just intelli-gent behavior, but of behavior motivated by conscious calculation of advantages, a calcu-lation that in turn is based on an explicit and internally consistent value system. [. . .] Theadvantage [. . .] for theoretical development is not that, of all possible approaches, it isthe one that evidently stays closest to the truth, but that the assumption of rational behavioris a productive one. It gives a grip on the subject that is peculiarly conductive to the devel-opment of theory. It permits us to identify our own analytical processes with those of thehypothetical participants in a conflict; and by demanding certain kinds of consistency inthe behavior of our hypothetical participants, we can examine alternative courses of behav-ior according to whether or not they meet those standards of consistency. The premise ofrational behavior is a potent one for the production of theory. (p. 4)</p><p>Schelling (1960/1980) also points out that irrationality can, in certain situations, bea strategic advantage. Believing in an irrational ideology, with ideas that are objectivelynot true, can be seen as a suspension of rationality that allows commitment to a certaincourse of action. Osama Bin Ladens claim we love death (Stengel, 2001) could beseen as an attempt to signal an extreme, arguably irrational, preference for conflict,that, if true, would make deterrence by the threat of conflict impossible.</p><p>The media are essential to terrorism; they allow terrorists to scale up intimidation ata low cost. In a recent study, Melnick and Eldor (2010) find that terrorists in Israel areprovided with media coverage free of charge that is on average worth NIS 0.38 millionper incident. The economic damage, measured by a decline in the Tel Aviv StockExchange, increases monotonically with the extent of media coverage. Without thepossibility of receiving public attention, terrorism, as symbolic violence, can qua defi-nitionem not exist. Its goal is to install fear beyond that of the immediate victim(Sandler &amp; Arce, 2007, p. 778). Margaret Thatcher described media attention as theoxygen of publicity on which [terrorists] depend (Apple, 1985, p. A3). Similarly,Laqueur (1976) argues that the media are the terrorists best friend. The terroristsact by itself is nothing. Publicity is all (p. 204).</p><p>While there seems to be unanimous consent about the symbioticity of terrorism andthe media (Hoffmann, 2006), theoretical research on the nature of this relationship israre. To the authors best knowledge, so far there have been two contributions thatanalyze, in a rational choice framework, how terrorists and the media interact.</p><p>Scott (2001) looks at the terrorismmedia interaction as a common propertyproblem in which terrorist groups compete for limited media attention. Because ofconvex preferences of the public regarding terrorist and nonterrorist news and finitepublic attention, more terrorist incidents will lower the coverage per incident. The pro-spect of reduced media attention induces terrorists to lower the equilibrium amount ofterrorism. He finds empirical evidence in support of the hypothesis that an increase interrorist incidents leads to lower media attention per incident.</p><p>Frey and Rohner (2007) have made another interesting contribution proposing agame-theoretic model with a terrorist group and the media as players. Three equilibriaemerge, one of which is unstable and the other two are corner solutions: either no ter-rorism occurs, and consequently there are no news about terrorism, or all terrorist effort</p><p>C.P. Pfeiffer214</p><p>Dow</p><p>nloa</p><p>ded </p><p>by [</p><p>UQ</p><p> Lib</p><p>rary</p><p>] at</p><p> 06:</p><p>00 1</p><p>3 N</p><p>ovem</p><p>ber </p><p>2014</p></li><li><p>is put into terrorism, and the media report about terrorism only. The problem with mul-tiple equilibria is that it is not clear which equilibrium will be chosen. In order to tacklethis problem, the authors develop a discrete choice model and calculate the conditionsfor a dominant strategy on both sides. Intermediate levels of terrorism are explained byextending the analysis to multiple terrorist groups. Frey and Rohner (2007) find empiri-cal evidence that media attention Granger-causes terrorism and vice versa. Conse-quently, they emphasize the importance of subsidizing high-quality journalism, anonattribution policy and a decentralization of the polity.</p><p>In this paper, a different game-theoretic model is proposed. First, the basic model isset up with two players, a terrorist group and the media, which are viewed as a singleplayer. Both players make their move simultaneously while they cannot communicatewith each other; common knowledge of rationality is assumed. The media maximizetheir utility by determining the probability that a terrorist attack makes it to thenews, thereby implicitly deciding on the fraction of terrorist news relative to othernews. Since the medias preferences are assumed to be constant, an expected highlevel of terrorism, resulting from radical terrorist preferences, will lead to a low report-ing propensity, whereas a low level of terrorism will lead to a high reporting propensity.The terrorist organization has political goals it wants to attain by employing nonv...</p></li></ul>