The Randomization of Terrorist Attacks

The purpose of this article is to explore the economic theoretical foundations of the idea that rational terrorist organizations deliberately randomize their attacks (by type, timing, location, and targets) to generate uncertainty and intimidation. A choice theoretic framework is applied to the analysis of the terrorist organization's behavior to determine whether welfare (utility) gains from the randomization of terrorist attacks are plausible and feasible. The randomization of attacks can appear to promise higher amounts of political influence for each resource input but it turns out that randomization cannot manufacture a situation where higher amounts of political influence are obtained for each resource input.The results imply that, rather than randomization and instability, the rational terrorist organization is more likely to prefer stability. The findings and implications provide a theoretical explanation for the non-randomness of terrorist attacks.Thismay be one small step towards explaining the patterns – non-randomness – in the time-series of terrorist incidents.     

Warranty design under buyer and seller risk aversion

This paper provides a framework in which warranty policies for non-repairable items can be evaluated according to risk preferences of both buyers and sellers. In particular, a warranty price schedule is established such that sellers are indifferent among the policies. Given this schedule, a buyer's response is expressed by selecting the price-warranty combination that minimizes disutility. Within this framework, a warranty can be viewed as an instrumet of risk management that can induce more sales and greater profitability. For given utility functions, analytical results for the development of a price schedule are developed. Numerical results illustrate the substitution effects between warranty terms, prices, and risk parameters.     

Landmarks in defense literature

Strategy in the Missile Age. By Bernard Brodie. RAND Corporation, Princeton University Press, Princeton, NJ, 1959. Paperback editions 1965, 1967.     

A dynamic nonlinear constrained optimal replacement model

A stochastically constrained optimal replacement model for capital equipment is constructed. Each piece of capital equipment, or machine, is characterized by its age and “utility” or “readiness” class. The readiness of a machine at any age is a stochastic function of its initial utility class and its age. The total discounted replacement cost of several replacement streams, each commencing with an initial machine, is minimized with respect to the replacement age and initial utility class of each machine, subject to a readiness constraint stating the lower bound on the expected number of machines in each utility class at any time. A general solution procedure is outlined and a specific case is solved in detail.     

Book reviews

European Security in the New Political Environment by James H. Wyllie, London: Addison, Wesley Longman, 1997, ISBN 0-582-24403-X (pbk), £13.99

Russia and Europe: The Emerging Security Agenda edited by Vladimir Baranovsky, Oxford: Oxford University Press, SIPRI, 1997, ISBN 0-19-829201-5 (hbk), £45.00

The Defeat of Japan by David Rees, Westport, Connecticut and London: Praeger, ISBN 0-275-95955-4 (hbk), £46.50

The Collective Naval Defence of the Empire, 1900-1940 by Nicholas Tracy (ed.), London: Ashgate, for the Navy Records Society, 1997, ISBN 1859-284-027 (hbk), £59.50

Knights in White Armour The New Art of War and Peace by Christopher Bellamy, London: Pimlico Press, 1997, ISBN 0-7126-739-03 (pbk), £12.50

Regional Orders: Building Security in a New World by avid A. Lake and Patrick M. Morgan (eds), University Park: Penn State Press, 1997, ISBN 0-271-01703-i (hbk), £49.50/$55, ISBN 0-271-01704-X (pbk), £7.95/$19.95

Contested Social Orders and International Politics by David Skidmore (ed.), Nashville: Vanderbilt University Press, 1997, ISBN 0-8265-1284-4 (hbk), $32.95

The Politics of Threat: Minuteman Vulnerability in American National Security Policy by David H. Dunn. London: Macmillan Press, 1997, ISBN 0-333-67816-8 (hbk), £45.00

The Sociology of the Military by Guiseppe Caforio (ed.), Cheltenham: Edward Elgar, 1998, ISBN 1-85898-619-2, 704 pp., £150

The Nordic Nations in the New Western Security Regime by Ingemar Dorfer, Baltimore: Johns Hopkins University Press, 1997, ISBN 0-943875-83-8 (hbk), £27, ISBN 0-943875-82-X (pbk), £13     

The elephant in the room

When United States (US) President Barack Obama announced in 2013 that he would host the first United States-Africa leaders' summit the next year, he was greeted with considerable scepticism. Many critics thought he was just playing catch-up with other countries and organisations which had been holding Africa summits for years, especially China. But, whatever the motives, the event itself proved to be a substantial success, probably re-setting US relations with Africa for many years to come.