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This article presents a model of terrorist attacks as signals where the government is uncertain as to whether it is facing a group that is politically motivated or militant. Pooling equilibriums result with two types of ex post regret: P-regret, where the government concedes to political types that would not subsequently attack; and M-regret, where the government does not concede to militant types that subsequently attack at greater levels. Avoidance of such regret defines a measure of the value of intelligence. Counter-terrorism policy can then be characterized in terms of whether a government should focus on increased intelligence versus increased security (hardening targets). The recommended use of asset freezing is also evaluated in terms of the resources required by terrorists to achieve the various equilibriums. Finally, this article supports the empirical finding of intertemporal substitution of resources by terrorists, concerned with the level of government response to their attacks.

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In this article, we examine a model of terrorism that focuses on the tradeoffs facing a terrorist organization that has two qualitatively different attack modes at its disposal. The terrorist organization's objective is to successfully attack at least one target. Success for the target government is defined as defending all targets from any and all attacks. In this context, we examine how terrorist entities strategically utilize an efficient but discrete attack technology — e.g., suicide attacks — when a more conventional mode of attack is available, and the optimal anti‐terrorism measures.© 2012 Wiley Periodicals, Inc. Naval Research Logistics, 2012

This article presents a signaling model of terrorist attacks, where the target government faces a trade-off from its counterterrorism responses and the backlash (counterreaction) that such responses incite. An endogenous characterization of terrorist spectaculars is specified, given a government's counterterrorism stance and the potential for backlash attacks. In particular, spectacular attacks are pooling, rather than separating, phenomena, whereby the government cannot discern, based on past attacks, the militancy of the terrorist group. The definition for ''spectacular'' terrorist attacks is inversely related to the government's toughness and its belief that it confronts a militant group. Policy recommendations are specified for non-eventspecific intelligence in relation to the avoidance of spectacular attacks or unnecessary concessions. Intelligence must be focused on the propensity for counterterrorism to give rise to a backlash attack.Keywords signaling games, terrorist spectaculars, value of intelligence, backlash attacks, counterterrorismThe unprecedented suicide skyjackings of September 11, 2001 (henceforth, 9/11), demonstrated that large-scale terrorist events-known as ''spectaculars''-can result in huge human and monetary losses. Other spectacular terrorist incidents include the suicide truck bombing of the U.S. Marine barracks in Beirut, Lebanon (October 23, 1983), the downing of Air India flight 182 over the Atlantic Ocean (June 23, 1985), the downing of Pan Am Flight 103 over Lockerbie, Scotland (December 21, 1988), the

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"This article examines the conditions under which the principal-agent model is self-activating/socially causal. We do so by exploring a principal-agent framework that allows for the possibility that rational agents may hold intrinsic preferences for autonomy in decision making and experience disutility from being monitored. Using a dynamic model of preference formation, we identify conditions under which the principal-agent model is self-activating in that, over time, the introduction of the model in an otherwise efficient monitor-worker relationship leads to the inefficient adoption of the agency model. We also examine the extent to which the agency model is robust when autonomy-preferring agents are introduced into the population. "("JEL "G30, L20, C72) Copyright 2007 Western Economic Association International.