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Terrorism, Skyjacking & Embezzlement. Foreign and Domestic. Points About Terrorism. Definition: The killing and injuring of innocent civilians for political purposes The perceived threat from foreign terrorists to the USA (at home) is relatively new (since 9/11)

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Points about terrorism
Points About Terrorism

  • Definition: The killing and injuring of innocent civilians for political purposes

  • The perceived threat from foreign terrorists to the USA (at home) is relatively new (since 9/11)

  • Earlier skyjackings in the US were not by terrorists

  • Terrorism has been a threat since World War II in Europe, much of it connected to the Middle East

  • We can learn from comparing the US reaction to skyjacking, and attempts to control it


Post 9 11

Attack

what

how

where

when

why? Why don’t our enemies love us?

Defense (focus)

what

how

where

when

why were we not prepared for the attack?

Post 9-11


Us wars

Domestic (over here)

independence

1812

Civil

Foreign (over there)

Mexico: Halls of Moctezuma

Spanish: San Juan Hill & Manila Bay

WWI: France

WWII: North Africa, Europe, Pacific

Korea

Vietnam

Gulf: Desert Storm

Afghanistan and Iraq

US Wars


Why were we not prepared theme 1 over there
Why were we not Prepared?Theme #1: “Over there… “

Chorus

Over there, over there,

Send the word, send the word over there -

That the Yanks are coming,

The Yanks are coming,

The drums rum-tumming

Ev'rywhere.

So prepare, say a pray'r,

Send the word, send the word to beware.

We'll be over, we're coming over,

And we won't come back till it's over

Over there.


America s best known world war i song
America’s Best Known World War I Song

  • “Over there, over there, send the word, send the word over there, that the yanks are coming, ….


Terrorism in the usa
Terrorism in the USA

  • Home grown

  • Foreign imports

  • Remedies


Over there
Over There

  • There have not been very many politically motivated attacks by foreign terrorists on the domestic USA until 9-11

    • World Trade Center ( Feb. 26, 1993)


Learning from history
Learning from History

  • Skyjacking in the USA

    • first in the USA was 1961

    • in contrast to skyjackings abroad, at most one skyjacking at home was, maybe, politically motivated by a someone with connections to the Balkans


Learning from economics
Learning from Economics

  • Thwarting embezzlement

    • inspection, I. E. audit


Recent history of us terrorism
Recent History of US Terrorism

  • Bombings

    • World Trade Center, New York

      • 6 killed, 1000+ injureed

    • Murtaugh Federal Building, Oklahoma City

    • Black Churches

  • Skyjackings


WTC 1993

Blackhawk Down 1993

Saudi Arabia 1996

Africa 1998




http://news.bbc.co.uk/onthisday/hi/dates/stories/february/26/newsid_2516000/2516469.stmhttp://news.bbc.co.uk/onthisday/hi/dates/stories/february/26/newsid_2516000/2516469.stm


Facts:http://news.bbc.co.uk/onthisday/hi/dates/stories/february/26/newsid_2516000/2516469.stm

My

Lecture

# 7 On

Corrections

Bureaucracy

“corrected”


Total International Terrorist Attackshttp://news.bbc.co.uk/onthisday/hi/dates/stories/february/26/newsid_2516000/2516469.stm

http://www.state.gov

Office of the Coordinator

for Counter-Terrorism

Patterns of Global Terrorism


Note: Thehttp://news.bbc.co.uk/onthisday/hi/dates/stories/february/26/newsid_2516000/2516469.stm

Small # of

Attacks in

North

America


Shock valuehttp://news.bbc.co.uk/onthisday/hi/dates/stories/february/26/newsid_2516000/2516469.stm

Of 9/11

Few attacks

In North

America, but

Many

Casualties


Skyjackings
Skyjackingshttp://news.bbc.co.uk/onthisday/hi/dates/stories/february/26/newsid_2516000/2516469.stm

  • The first skyjacking was a Peruvian carrier in February 1931

  • The first skyjacking of a US carrier was a National Airlines flight destined for Key West Florida on May 1, 1961


The Legend of D. B. Cooperhttp://news.bbc.co.uk/onthisday/hi/dates/stories/february/26/newsid_2516000/2516469.stm


Us response to domestic skyjackings
US Response to Domestic Skyjackingshttp://news.bbc.co.uk/onthisday/hi/dates/stories/february/26/newsid_2516000/2516469.stm

  • Armed Federal Marshals on Flights

    • mostly on flights on the Eastern seaboard corridor

  • Congress Passes the US Civil Aviation Security Program in 1973


Model of US Skyjackings and Bomb Threatshttp://news.bbc.co.uk/onthisday/hi/dates/stories/february/26/newsid_2516000/2516469.stm

Terrorism

Foreign

Skyjackings

US

Skyjackings

2 Year Lag

Bomb Threats

to US Aircraft

Inspection


Borch model of inspection
Borch Model of Inspectionhttp://news.bbc.co.uk/onthisday/hi/dates/stories/february/26/newsid_2516000/2516469.stm

  • Two actors

    • employee(embezzler) & firm

    • skyjacker & airport security

  • Two sets of values or payoffs to the outcomes

  • No dominant strategy for either actor

  • Need to keep your adversary guessing

  • Embezzler’s expected outcome: break even

  • Firm’s expected outcome: dead-weight cost of inspection


Defense Against Embezzlement and Skyjackinghttp://news.bbc.co.uk/onthisday/hi/dates/stories/february/26/newsid_2516000/2516469.stm

I. Options for choice: States of the world

Firm

No

Audit

E A

E Â

Embezzle

Employee

Ê A

Ê Â

Not


Defense Against Embezzlement and Skyjackinghttp://news.bbc.co.uk/onthisday/hi/dates/stories/february/26/newsid_2516000/2516469.stm

II. Valuation of the options, i.e. choices

A. Payoffs to the employee

Audit

No

- 

G

Embezzle

0

0

Not

B. Payoffs to the firm

Audit

No

- C

- L

Embezzle

- C

0

Not


Circular contest
Circular Contesthttp://news.bbc.co.uk/onthisday/hi/dates/stories/february/26/newsid_2516000/2516469.stm

  • Best outcome for the employee

    • embezzle and no audit

  • Best outcome for the firm

    • no embezzling and no audit

  • Worst outcome for the employee

    • embezzle and get audited

  • Worst outcome for the firm

    • don’t audit and get embezzled


+http://news.bbc.co.uk/onthisday/hi/dates/stories/february/26/newsid_2516000/2516469.stm

Payoff to the Firm

Ê Â

-

+

Payoff to the Employee

-


+http://news.bbc.co.uk/onthisday/hi/dates/stories/february/26/newsid_2516000/2516469.stm

Payoff to the Firm

Ê Â

-

+

Payoff to the Employee

- C

Ê A

-


+http://news.bbc.co.uk/onthisday/hi/dates/stories/february/26/newsid_2516000/2516469.stm

Payoff to the Firm

Ê Â

-

+

- 

Payoff to the Employee

- C

E A

Ê A

-


+http://news.bbc.co.uk/onthisday/hi/dates/stories/february/26/newsid_2516000/2516469.stm

Payoff to the Firm

Ê Â

-

+

- 

G

Payoff to the Employee

- C

E A

Ê A

- L

E Â

-


+http://news.bbc.co.uk/onthisday/hi/dates/stories/february/26/newsid_2516000/2516469.stm

Payoff to the Firm

Ê Â

-

+

- 

G

Payoff to the Employee

- C

E A

Ê A

- L

E Â

Probability of audit = 1

-

Probability of Audit = 0


Firm can choose a probability of audit between 0 and 1
Firm Can Choose A Probability Of Audit Between 0 and 1http://news.bbc.co.uk/onthisday/hi/dates/stories/february/26/newsid_2516000/2516469.stm

  • If PA = 1, then employee loses - 

  • If PA = 0, then employee gains G

  • How about a probability between 0 and 1 like G/( + G)


+http://news.bbc.co.uk/onthisday/hi/dates/stories/february/26/newsid_2516000/2516469.stm

Payoff to the Firm

Ê Â

-

+

- 

G

Payoff to the Employee

- C

E A

Ê A

- L

Probability of audit = 1

E Â

-

Probability of Audit = 0


Defense Against Embezzlement and Skyjackinghttp://news.bbc.co.uk/onthisday/hi/dates/stories/february/26/newsid_2516000/2516469.stm

Keep Your Adversary Guessing

Expected Payoff to the employee

Audit:

PA

No:

1 - PA

- 

G

Embezzle: PE

0

0

Not: 1- PE

PE PA(- ) + PE(1 - PA) G = 0 = No Incentive

PA(- ) + PA(- G) + G = 0 = PA(  + G) - G

PA = G / (+ G)


Reaction Curve of the Employee to the Firmhttp://news.bbc.co.uk/onthisday/hi/dates/stories/february/26/newsid_2516000/2516469.stm

1.0

PE

0

1.0

PA

G/( + G)


Reaction Curve of the Employee to the Firmhttp://news.bbc.co.uk/onthisday/hi/dates/stories/february/26/newsid_2516000/2516469.stm

1.0

PE

0

1.0

PA

G/( + G)


Reaction Curve of the Employee to the Firmhttp://news.bbc.co.uk/onthisday/hi/dates/stories/february/26/newsid_2516000/2516469.stm

1.0

PE

0

1.0

PA

G/( + G)


Reaction Curve of the Firm to the Employeehttp://news.bbc.co.uk/onthisday/hi/dates/stories/february/26/newsid_2516000/2516469.stm

VF = PEPA(-C) +(1-PE)PA(-C) + PE(1-PA)(-L)

1.0

PE

C/L

0

0

PA

1.0


Reaction Curve of the Firm to the Employeehttp://news.bbc.co.uk/onthisday/hi/dates/stories/february/26/newsid_2516000/2516469.stm

VF = PEPA(-C) +(1-PE)PA(-C) + PE(1-PA)(-L)

1.0

PE

C/L

0

G/(G+P

0

PA

1.0


Post 9 111

Attackhttp://news.bbc.co.uk/onthisday/hi/dates/stories/february/26/newsid_2516000/2516469.stm

what

how

where

when

why? Why don’t our enemies love us?

Defense (focus)

what

how

where

when

why were we not prepared for the attack?

Post 9-11


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