The economics of criminal and terrorist behaviour

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The economics of criminal and terrorist behaviour

The economics of criminal and terrorist behaviour deals with the effect of incentives on criminal and terrorist behaviour and the possible measures to reduce crime. Economic models not only predict and explain the behaviour of criminals and terrorists, but can also be used to describe the causes of crime and terrorism and the dynamic interaction between criminals/terrorists and security measures.

Rational economic agents

Economic theory is based on the assumption that criminals and terrorists (even suicidal bombers) behave like rational economic agents[1], which implies that they face a well defined set of preferences, and will select their preferred choice of action to maximize their utility within a given resource restraint[2]. Consequently, economic theory predicts that a change in the relative price (due to for example security measures) will result in a shift of criminal and terrorist action towards the relatively cheaper activity (legal or not legal).

Economic scholars distinguish (see clickable map below):

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Related subjects

The economics of terrorist and criminal behaviour relates to:

  1. The economic impacts of security threats (crime & terrorism)
  2. The economic impacts of security measures

For other related subjects, see the clickable map below:

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Footnotes and references

  1. ↑ A rational economic agent is an agent with clear preferences, who models uncertainty via expected values, and "always chooses to perform the action that results in the optimal outcome for itself from among all feasible actions" (Source: Wikipedia). A rational agent is also referred to as the Homo Economicus
  2. ↑ Enders and Sandler (2006)

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