The Preferred Risk Habitat of Al-Qa'ida Terrorists

Abstract

The purpose of this paper is to investigate the attack method choices of terrorists. In particular, this paper addresses the question of whether the attack method choices of terrorists are guided by a preferred risk habitat. Terroristic organisations might select attack methods as part of an overall ‘program’ in a manner that takes into consideration the overall level of risk that the organisation bears. Alternatively, they might select attack methods sequentially or ‘one at a time’ in a manner that is consistent with their risk preference but without considering the overall risk of their operations. The empirically testable hypothesis that emerges is that terroristic organisations who select attack methods sequentially in a manner consistent with their risk preference will choose attack methods that exhibit similar a similar level of volatility (risk). The results indicate a calculated, non-random consideration of the consequences of particular attack methods on the risk of its overall operations and the terrorist organisation’s utility.

Keywords: Al-Qa`ida, risk, preferred habitat, attack methods, choices, volatility

JEL Classification: H56, D74, D81