G M Daniel Arce

Counterterrorism: A Game-Theoretic Analysis

This article establishes the prevalence of deterrence over preemption when targeted governments can choose between either policies or employ both. There is a similar proclivity to favor defensive counter-terrorist measures over proactive policies. Unfortunately, this predisposition results in an equilibrium with socially inferior payoffs when compared with proactive responses. Proactive policies tend to provide purely public benefits to all potential targets and are usually undersupplied, whereas defensive policies tend to yield a strong share of provider-specific benefits and are often oversupplied. When terrorists direct a disproportionate number of attacks at one government, its reliance on defensive measures can disappear. Ironically, terrorists can assist governments in addressing coordination dilemmas associated with some antiterrorist policies by targeting some countries more often than others.This article establishes the prevalence of deterrence over preemption when targeted governments can choose between either policies or employ both. There is a similar proclivity to favor defensive c...

Terrorism & Game Theory

This keynote paper examines how game-theoretic analyses of terrorism have provided some policy insights that do not follow from nonstrategic analyses. Some new game-theoretic applications are indicated that concern terrorist targeting of businesses, officials, and the general public, where targets can work at cross-purposes as they attempt to deflect the attack. Other novel applications involve government choice among alternative antiterrorism policies, and government concessionary policy when terrorists are either hardliners or moderates in their viewpoint. Directions for future research are also indicated.

Transnational public goods: strategies and institutions

Abstract Weaker-link and better-shot public goods are prevalent in examples of transnational collective action. Instances include dike building, atmospheric monitoring, cyberspace virus control, deforestation, disease control, and peacekeeping. This paper analyzes essential game-theoretic features of such public goods, which allow correlated strategies to provide Pareto-improving alternatives to the Nash equilibria. Correlation is justified as providing a formal structure for the veil of uncertainty and political leadership. Weaker-link and better-shot public goods differ in terms of the appropriate institutional design. We also consider the consequences of diminishing returns on game forms and institutional prescriptions.

TERROR SUPPORT AND RECRUITMENT

We analyse a dynamic model linking terrorist activities to popular support through a recruitment mechanism. It is shown that anti‐terrorism policies focusing on liberal ideals (reducing repression, increasing economic opportunity) are effective at abating recruitment, thereby affecting the dynamic stability of terrorist attacks. In contrast, deterrence’s comparative advantage is in counteracting hard‐core members, implying that terror eradication itself requires an emphasis on hard‐core membership, rather than popular support for terror activities.

An Evolutionary Game Approach to Fundamentalism and Conflict

This paper investigates the evolutionary equilibria of a clash of cultures game where conflict results from failures to share social power in individual pairings. The model is based on a adaptation of Skyrm�s [1996] analysis of the evolution of social justice within the ultimatum game. Members of a general population are matched with those of a fundamentalist population, the latter being more cohesive and insistent that its identity traits define the norms for, and outcomes of, social, economic, and political interaction. The underlying replicator dynamics are found to be a function of in the initial extent of moderate behavior within the general population, and the level of cohesion and intolerance within the fundamentalist population. Simulations of the replicator dynamics reveal a tradeoff between the intolerance of fundamentalism and the likelihood of a takeover. This tradeoff is reversed if fundamentalism is falsifiable: affording non-fundamentalists the ability to signal fundamentalist traits produces a bandwagon effect.

PURE PUBLIC GOODS VERSUS COMMONS: BENEFIT-COST DUALITY

This paper utilizes benefit-cost duality to differentiate the problems associated with a pure public good from the problems associated with a commons. For the public good scenario, contributors’ benefits are public or available to all, while provision costs impact only the contributor. In a commons, crowding costs are public, while benefits affect only the user. Although both problems possess the same game form for their canonical representations, collective-action implications differ: for example, the relative positions of the Nash equilibrium and Pareto optimum, the form of the exploitation hypothesis, and the need for selective incentives or punishments. (JEL H41, D70)

A Cooperative Game Theory of Noncontiguous Allies

This paper develops a cooperative game-theoretic representation of alliances with noncontiguous members that is based on cost savings from reducing overlapping responsibilities and sequestering borders. For various scenarios, three solutions (the Shapley value, nucleolus, and cores centroid) are found and compared. Even though their underlying ethical norm varies, the solutions are often identical for cases involving contiguous allies and for rectangular arrays of noncontiguous allies. When transaction costs and/or alternative spatial configurations are investigated, they may then differ. In all cases the cooperative approach leads to a distribution of alliance costs that need not necessarily coincide with the traditional emphasis on gross domestic product size as a proxy for deterrence value (the exploitation hypothesis). Instead, burdens can now be defined based upon a countrys spatial and strategic location within the alliance. Copyright 2001 by Blackwell Publishing Inc.

Asymmetric Leadership and International Public Goods

The foreign assistance policies of major donor nations, the United NationsDevelopment Programme, and the World Bank have recently been redefined to explicitly address the provision of international public goods (IPGs). Examples of IPGs include peacekeeping, financial market stability, and biodiversity. Given the global heterogeneity across nations, it is therefore curious to find that most studies on which these redefinitions are based assume symmetric costs in the provision of IPGs. Within an evolutionary framework, the author analyzes the prospects for the voluntary provision of IPGs when the benefit/cost ratio varies across nations and characterizes the results for summation, weakest link, weaker link, best-shot, and better shot IPGs. The author demonstrates that a leading- by-example strategy by the country with the highest benefit/cost ratio can implement the cooperative outcome.The foreign assistance policies of major donor nations, the United NationsDevelopment Programme, and the World Bank have recently been redefined to explicitly address the provision of international public goods (IPGs). Examples of IPGs include peacekeeping, financial market stability, and biodiversity. Given the global heterogeneity across nations, it is therefore curious to find that most studies on which these redefinitions are based assume symmetric costs in the provision of IPGs. Within an evolutionary framework, the author analyzes the prospects for the voluntary provision of IPGs when the benefit/cost ratio varies across nations and characterizes the results for summation, weakest link, weaker link, best-shot, and better shot IPGs. The author demonstrates that a leading- by-example strategy by the country with the highest benefit/cost ratio can implement the cooperative outcome.

The Evolution of Heterogeneity in Biodiversity and Environmental Regimes

Biodiversity and environmental protection are examples of international public goods problems that comprise a symmetrical system of rights and obligations. Moreover, the underlying scientific, economic, and political conditions do not necessarily lead to a prisoners dilemma. Yet from this symmetrical beginning, voluntary (Nash) equilibria often require heterogeneous actions, the resolution of which is often couched as a North-South or East-West issue. The author uses evolutionary game theory to examine how heterogeneous behavior can emerge over time and finds that asymmetries need not be universally determined in terms of economic or technological differences. In particular, the author finds that the evolution of international environmental protocols is a function of scale: the ability to achieve a cooperative solution depends on the distribution of signatories (namely, nonparticipants in the population at large). Such scale considerations reveal an organizational pattern of collective action that does not require across-the-board contribution or abatement levels.Biodiversity and environmental protection are examples of international public goods problems that comprise a symmetrical system of rights and obligations. Moreover, the underlying scientific, economic, and political conditions do not necessarily lead to a prisoners dilemma. Yet from this symmetrical beginning, voluntary (Nash) equilibria often require heterogeneous actions, the resolution of which is often couched as a North-South or East-West issue. The author uses evolutionary game theory to examine how heterogeneous behavior can emerge over time and finds that asymmetries need not be universally determined in terms of economic or technological differences. In particular, the author finds that the evolution of international environmental protocols is a function of scale: the ability to achieve a cooperative solution depends on the distribution of signatories (namely, nonparticipants in the population at large). Such scale considerations reveal an organizational pattern of collective action that does not require across-the-board contribution or abatement levels.