Analysis of a Strategic Terror Organization

The authors model a terrorist organization's choice over the scale and planning horizon of terror attacks and the consequences for the organization's evolution. The organization can engage in short-term attacks planned and executed in a single period, characterized by a low fixed cost and relatively high marginal cost, and longer term attacks planned and executed over two periods, having a high fixed cost but relatively low marginal cost. Longer term attacks require more resources and cause more damage if successful. Successful attacks increase the organization's size; in addition, the organization has a natural growth rate. Attacks can fail because of failed execution or counterterror interdiction. In a two-period version of this model, the authors analyze the terror organization's attack decisions. They use simulations to characterize optimal strategies and explore their implications for the growth of the organization. The authors identify a set of strategic regimes, and the results show that they always occur in fixed order as a function of the organization's initial strength.