Recently several studies have used economic methodology to interpret and analyze terrorists behavior. This interdisciplinary endeavor is aimed at shedding as much light as possible on measures to eliminate one of the most dangerous problems facing the next decade. The paper suggests a set of...

The application of economic methodology to the problem of terrorism is discussed. Theoretical and empirical results are discussed with particular focus on the September 11 attack and the retaliatory response by the United States. Economists have relied on the rational agent model to derive...