The UN in the Lab

50 Pages Posted: 11 Apr 2013 Last revised: 6 Apr 2016

See all articles by Malcolm Kass

Malcolm Kass

University of Texas at Dallas - School of Economic, Political and Policy Sciences

Enrique Fatas

University of East Anglia (UEA) - Centre for Behavioural and Experimental Social Science (CBESS); University of Valencia - LINEEX

Catherine C. Eckel

Texas A&M University

Daniel G. Arce

University of Texas at Dallas - Department of Economics & Finance

Date Written: January 23, 2013

Abstract

We consider two alternatives to inaction for governments combating terrorism, which we term Deterrence and Prevention. Deterrence – investing in resources that reduce the impact of an attack – generates a negative externality to other governments, making their countries a more attractive objective for terrorists, while Prevention – investing in resources that reduce the ability of the terrorist organization to mount an attack – creates a positive externality by reducing the overall threat of terrorism for all. Due to the structure of this interaction, countries can benefit from coordination of policy choices, and international institutions (such as the UN) can be utilized to facilitate coordination and implement agreements to share the burden of Prevention. Using a nested Prisoner’s Dilemma game we investigate experimentally if subjects can coordinate on a cooperative strategy more frequently when different levels of cost sharing are implemented by exogenously imposed institutions. In all treatments, burden sharing does not alter the Prisoner’s Dilemma structure of the game (deterrence is always the unique Nash strategy). We compare three levels of burden-sharing to a baseline with no burden sharing in a between-subjects design, and find that burden sharing generates a non-linear effect on the choice of the efficient Prevention strategy and overall performance. Only institutions supporting a high level of mandatory burden sharing generate a significant improvement in the use of the Prevention strategy.

Keywords: Counterterrorism policy, Prisoner's dilemma, lab experiment, cost sharing

JEL Classification: D74, C92

Suggested Citation

Kass, Malcolm and Fatas, Enrique and Eckel, Catherine C. and Arce, Daniel G., The UN in the Lab (January 23, 2013). Social Choice and Welfare, Vol. 45, No. 3, 2015, Available at SSRN: https://ssrn.com/abstract=2248255 or http://dx.doi.org/10.2139/ssrn.2248255

Malcolm Kass

University of Texas at Dallas - School of Economic, Political and Policy Sciences ( email )

P.O. Box 830688, GR 31
Richardson, TX 75083
United States

Enrique Fatas

University of East Anglia (UEA) - Centre for Behavioural and Experimental Social Science (CBESS) ( email )

United Kingdom

University of Valencia - LINEEX ( email )

Campus Tarongers
E-46022 Valencia
Spain
+34.963.828.643 (Phone)
+963.828.415 (Fax)

Catherine C. Eckel (Contact Author)

Texas A&M University ( email )

5201 University Blvd.
College Station, TX 77843-4228
United States

Daniel G. Arce

University of Texas at Dallas - Department of Economics & Finance ( email )

Richardson, TX 75083
United States

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