A terrorist without capacity constraints attacks two independent targets. As the target defence efficiency decreases, the target first increases its defence, and thereafter decreases and eventually does not defend because of the high cost. With terrorist capacity constraints, targets become...

The prisoner's dilemma (PD) is played by two players in each of two groups. The two groups compete for an external prize whose allocation is determined by the degree of within-group coordination. The experimental evidence supports the predictions of multilevel game theory well.

Iceberg costs are modelled as a transaction cost function, which increases exponentially in an action chosen by each player. The model estimates how much the players' joint ex post shares shrink in terms of their transaction constants and production.