This chapter reviews game-theoretic and choice-theoretic depictions of terrorist behavior. A simple game-theoretic framework is presented to ascertain under what circumstances a government would want to precommit itself to a no-negotiation strategy. In another game model, we analyze whether two...

The chapter surveys the empirical literature concerning the measurement of terrorism, effectiveness of counterterrorism policies, the economic consequences of terrorism, and the economic causes of terrorism. In Section 2, terrorist incidents are grouped according to incident type, victim, and...

Choice-theoretic models describe economic behavior of individuals who maximize benefits and minimize costs. Analysis leads to the testable behavior of terrorists, while government policy can raise the costs and reduce the benefits.