Terrorist Choice: A Stochastic Dominance and Prospect Theory Analysis

Abstract

The paper explores terrorist choice by applying two well-known theoretical frameworks: stochastic dominance and prospect theory. We analyse each pair of attack methods that can be formed from the RAND-MIPT database and the Global Terrorism Database (GTD). Instances of stochastic dominance are identified. Prospect theory orderings are computed. Attention is accorded to the identification of ‘trigger points’ and the circumstances that may lead to an increased likelihood that a terrorist will select an attack method associated with a higher expected number of fatalities, i.e. a potentially more damaging attack method.

Keywords: Terrorist Choice, Prospect Theory, Stochastic Dominance, Attack Methods, Trigger Points, Fatalities

JEL Classification: D03, D81, H56, K42