Abstract
Motivated by recent examples of collective effort on the war on terror, we examine the incentives that retaliation may produce for the endogenous formation of an international counterterror coalition. We show that there are quite reasonable circumstances under which any nation that is a target of a terrorist attack finds it desirable to be a member of the international counterterror coalition, holding the choices of all other nations as given. The incentives to join the coalition are the group-specific benefits from retaliation enjoyed by each coalition member, the relatively lower spillover benefit from retaliation enjoyed by each stand-alone nation, and the inability of pre-emptive measures to avert terrorist attacks. The disincentive to join is the anticipated backlash from retaliation, which targets coalition members only.
Highlights
Governments often retaliate after some citizens they represent become victims of terrorist attacks
The key factors that we consider are as follows: (i) the sequential nature of strategic moves, with retaliation occurring at the last stage; (ii) the group-specific and internalized public benefits from retaliation enjoyed by coalition members; (iii) the external public benefit from retaliation enjoyed by stand-alone nations; (iv) the external backlash benefit produced by retaliation and enjoyed by the terrorist organization; and (v) the effective rate of pre-emptive counterterror measures in producing a cost to terrorist activities
Motivated by various observations of joint international retaliation triggered by terrorist attacks, we focus on retaliation by a potential counterterror coalition only
Summary
Governments often retaliate after some citizens they represent become victims of terrorist attacks (see, e.g., Crenshaw [1], Merari [2], Lee [3], Lee and Sandler [4], Kydd and Walter [5], Benmelech et al [6], Carter [7], and Gaibulloev and Sandler [8]). The incentives to join the coalition are the group-specific benefits from retaliation enjoyed by each coalition member, the relatively lower spillover benefit from retaliation enjoyed by each stand-alone nation, and the inability of pre-emptive measures to avert terrorist attacks. The terrorist organization knows the size and composition of the counterterror coalition when it makes its choices, as well as the identities of stand-alone nations and the pre-emptive and defensive actions p and d undertaken by all nations. It knows how the pecuniary externality associated with retaliation affects its resources and fully anticipates the amount of retaliation that it will face if it attacks the counterterror coalition. D’Aspremont et al [23] and apply the internal and external stability criteria:
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