Transnational Coordination Failures in Intertemporal Counterterrorism Games
Faria, João Ricardo
Silva, Emilson C. D.
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This paper fills an important gap in the literature. It is the first systematic effort of addressing counterterrorism policy coordination failures due to transnational intertemporal externalities. As these externalities involve both spatial and time dimensions, non-cooperative policy coordination failures are better captured in a framework that allows us to consider two types of non-cooperative dynamic games, one in which national authorities are myopic and another in which they are farsighted. We show that the steady state outcomes for both types of non-cooperative games are characterized by larger counterterrorism expenditures than their counterparts in the social optimum. The farsighted equilibrium always yields greater levels of counterterrorism expenditures, terrorist activities and violence than those produced by the myopic equilibrium. Thus, the distortion produced by the farsighted equilibrium is greater than the distortion produced by the myopic equilibrium.