Informing Homeland Security Strategy Through Gaming Theory

1. Informing Homeland Security Strategy Through Gaming Theory University of Colorado at Colorado Springs College of Engineering and Applied Science Computer Science Department Ph.D Thesis Proposal Richard L. White Faculty Advisors: Dr. Edward Chow (chair) Dr. Terrance Boult Dr. Ziaobo Zhou Dr. Scott Trimboli Dr. Stan Supinski

2. Informing Homeland Security Strategy Through Gaming Theory Presentation Overview • Problem Description • Problem Analysis • Related Research • Thesis Proposal • Research Proposal • Conclusion Law Public Administration History Political Science International Relations Sociology Economics Mathematics Engineering Program Policy Track Thesis Proposal

3. Informing Homeland Security Strategy Through Gaming Theory What is the terrorist threat? • What prompted the largest reorganization of US government since WWII? • Are we safe now Osama bin Laden is dead? Is the threat Islamic extremism? • No – 1982 Marine Barracks • No – 1993 WTC Bombing Is the threat mass casualties? • No – Disease & Accidents • No – 25 Terrorism Deaths since 2001

4. Informing Homeland Security Strategy Through Gaming Theory Macroterrorism1 >= 500 deaths / $1B damages On September 11, 2001, 19 men armed with no more than box cutters and pepper spray inflicted as much damage as the Imperial Japanese Navy on December 7, 1941. Critical Infrastructure joined Weapons of Mass Destruction as a means for small groups or individuals to inflict catastrophic damage once wielded by a nation’s military might.2 1Woo, 2003 29/11 Commission Report, 2004

5. Informing Homeland Security Strategy Through Gaming Theory Homeland Security Strategy • 2002 Office of Homeland Security • 2007 Homeland Security Council • 2010 National Security Council Objectives3 • Prevent terrorist attack within US • Reduce vulnerability to terrorism • Minimize damage and rapidly recover3 Strategy4 • Prevent • Protect • Respond • Recover 32002 National Strategy for Homeland Security 42002 National Strategy for Homeland Security

6. Informing Homeland Security Strategy Through Gaming Theory Is it a good strategy? 2004 GAO Evaluation Criteria • Purpose, scope, & methodology • Problem definition & risk assessment • Goals, objectives, & measures of merit • Resources, investments, risk management • Roles, responsibilities, & coordination • Integration and implementation Criteria Formulation • Statutory requirements • Legislative & Executive branch guidance • 1993 Gov’t Performance Results Act • General literature review • Study of past GAO reports • Past Commission Recommendations • Comments from ANSER and RAND5 No Theory 5Yim, 2004

7. Informing Homeland Security Strategy Through Gaming Theory Can we make better strategy? Theoretical Framework • Methodological basis for disciplined thought process • Assists others in comprehending, evaluating, and critiquing merits • Provides roadmap for more complete analysis • Facilitate evaluation & execution • Better communication6 Better Strategy 6Yarger, 2006

8. Informing Homeland Security Strategy Through Gaming Theory Which theory? International Relations Theory • Institutionalist • Liberal • Epistemic • Realism Realism Predominates Today • States rational, unitary actors in anarchy • States have fixed, conflictual goals • Relations governed by material capability7 Terrorists Not States 7Legro & Moravcsik, 1999

9. Informing Homeland Security Strategy Through Gaming Theory Which theory? Terrorism Theory • Psychological • Societal • Systemic Collectively, terrorism theories address motivations why people turn to terrorism. The underlying assumption is that if you can isolate the cause, you can eliminate the effect. No Terrorist Personality8 8Borum, 2004

10. Informing Homeland Security Strategy Through Gaming Theory Which theory? Terrorism Risk Modeling • Deterministic Modeling • Resorts to subjective expert judgment • Stochastic Games • Require continual parameter adjustment • Network Analysis • Requires protected personal information • Gaming Theory • No expert judgment • Limited parameterization • Imperfect information • Incorporates human behavior

11. Informing Homeland Security Strategy Through Gaming Theory Game Theory • Formal study of conflict & cooperation • Agents’ actions are interdependent • Broad application across disciplines • Internally consistent math foundation • Cooperative games: power sharing • Noncooperative games: strategic choices • Strategic form • Extensive form • Dominant strategies • Nash equilibrium • Mixed strategies • Imperfect information9 9Turocy & Stengel, 2001

12. Informing Homeland Security Strategy Through Gaming Theory GT Terrorism Applications • Hostage Negotiation Policy • Terrorist Target Selection • Attack Signaling • Strategic Accommodation10 10Sandler & Arce, 2003

13. Informing Homeland Security Strategy Through Gaming Theory Related Research • Sandler, T., Tschirhart, T. T., and Cauley, J. (1983). “A theoretical analysis of transnational terrorism,” American Political Science Review, Vol. 77, No. 4. • Atkinson, S. E., Sandler, T., and Tschirhart, J. T. (1987). “Terrorism in a bargaining framework”, Journal of Law and Economics, Vol. 30, No. 1. • Lapan, H. E., Sandler, T. (1988). “To bargain or not to bargain: That is the question,” American Economic Review, Vol. 78, No. 2. • Sandler, T., & Lapan, H. E. (1988). “The calculus of dissent: An analysis of terrorists’ choice of targets”, Synthese, Vol. 76, No. 2. • Lee, D. R., & Sandler, T. (1989). On the optimal retaliation against terrorists: The paid-rider option”, Public Choice, No. 61. • Enders, W., Sandler, T. & Cauley, J. (1990). “UN conventions, technology and retaliation in the fight against terrorism: An economic evaluation”, Terrorism and Political Violence, No. 2. • Sandler, T. (1992). “Collective Action: Theory and Applications”, Ann Arbor: University of Michigan Press. • Enders, W., & Sandler, T. (1993). “The effectiveness of anti-terrorism policies: Vector-autoregression-interventions analysis”, American Political Science Review, 87, No. 4. • Lapan, H.E., Sandler, T. (1993). “Terrorism and signaling,” European Journal of Political Economy, Vol. 9, No. 3. • Enders, W., Sandler, T. (1995). “Terrorism: Theory and Applications”, Handbook of Defense Economics, Vol. 1 (pp. 213-249). Amsterdam: North-Holland. • Sandler, T. (1993). “Collective action and transnational terrorism”, World Economy, Vol. 26, No. 4. • Sandler, T., Siqueira, K. (2002). “Global terrorism: Deterrence versus preemption,” Unpublished manuscript, University of Southern California. • Sandler, T., Arce M., D. G. (2003). “Terrorism and Game Theory,” Simulation and Gaming, Vol. 34, No. 3. • Sandler, T., Arce M., D. G. (2003). “Pure public goods versus commons: Benefit-cost duality”, Land Economics, Vol. 79, No. 3. • Sandler, T., & Enders, W. (2004). “An Economic Perspective on Transnational Terrorism”, European Journal of Political Economy, Vol. 20, No. 1. • Sandler, T. (2005): “Collective versus unilateral responses to terrorism”, Public Choice, Vol. 124. • Sandler, T. and D. G. Arce (2007): “Terrorism: A game-theoretic approach”, Handbook of Defense Economics, Vol. 2. Amsterdam: North-Holland. • Sandler, T., Siqueira, K. (2008). “Games and terrorism: Recent developments”, Simulation Gaming Online, May 7, 2008, http://sg.sagepub.com/. • Sandler, T. And W. Enders (2008): “Economic consequences of terrorism in developed and developing countries: An overview”, Terrorism, Economic Development, and Political Openness, Cambridge University Press, Cambridge. • Sandler, T., Arce, D.G. and W. Enders (2009): “Transnational terrorism”, Global Crises, Global Solutions, Cambridge University Press, Cambridge. • Sandler, T. (2009). “The Past and Future of Terrorism Research”, Revista de Economia Aplicada, No. 50. • Sandler, T. and K. Siqueira (2009): “Games and terrorism: Recent developments”, Simulation and Gaming, Vol., 40, No. 2.

14. Informing Homeland Security Strategy Through Gaming Theory Game Informed Strategy Sandler’s game theoretic analysis of terrorism, and of others, follow some common themes: • Address one or more strategic interactions • Generally two or three strategic players • They use multiple stages • Number of continuous variables limited11 11Sandler & Siqueira, 2008

15. Informing Homeland Security Strategy Through Gaming Theory GT & Homeland Security Strategy • The impressive work amassed by Sandler and others to date have made an indirect impact on homeland security strategy. • We wish to extend their techniques to more directly inform homeland security strategy with respect to macroterrorism. • Examination of Sandler’s applications reveal no underlying themes to problem selection. • In part, their methods are restricted to the ability to frame specific problems within a small set of parameters amenable to mathematical computation. 3Citation

16. Informing Homeland Security Strategy Through Gaming Theory Finding HSS Problem Sets Denial Topoi • Means • Motive • Opportunity Macroterrorism Risk Model • Weapons of Mass Destruction • Critical Infrastructure 3Citation

17. Informing Homeland Security Strategy Through Gaming Theory Denial Topoi • In rhetorical theory, “topoi” are a set of common arguments. • In law, the Denial Topoi, means, motive, opportunity, are heuristic tools that help lawyers convince juries the strength or weakness of a case.12 • The strength of the Denial Topoi is based on long standing assumption that crime is only possible when all three elements are present. • Use same heuristic to remove possibility of committing macroterrorism. The Fire Triangle. At the end of the 18th century, Antoine-Laurent Lavoisier (1743–1794) unveiled the mystery of fire, discovering that its anatomy- and minimum common denominator- constituted a triangle whose sides corresponded to heat (H), fuel (F) and oxygen (O). Lavoisier also deducted the biconditional characteristic of fire, i.e., it can occur if, and only if, all three elements are present, H, F, O ↔ Fire. Since then the fire triangle has been the foundation of all firefighting techniques.13 12Goodwin, 2006 13Rangel, 2005

18. Informing Homeland Security Strategy Through Gaming Theory Deliberate vs. Accidental Deliberate acts of malice require all three elements of means, motive, opportunity. Accidents presumably lack motive, but still require means and opportunity (Heinrich’s Domino Theory).14 Heinrich’s Dominos Personal injury (the final domino) occurs only as a result of an accident. An accident occurs only as a result of a personal or mechanical hazard. Personal and mechanical hazards exist only through the fault of careless people or poorly designed or improperly maintained equipment. Personal faults are inherited or acquired as a result of social environment or ancestry. Environment is where and how a person was raised and educated. 14Cleveland State University, 2011

19. Informing Homeland Security Strategy Through Gaming Theory Macroterrorism Model Weapons of Mass Destruction15 • Chemical • Biological • Radiological • Nuclear Critical Infrastructure16 • Agriculture & Food • Defense Industrial Base • Energy • Healthcare and Public Health • National Monuments and Icons • Banking and Finance • Water • Chemical Plants • Commercial Facilities • Critical Manufacturing • Dams • Emergency Services • Nuclear Reactors, Materials, & Waste • Information Technology • Communications • Postal and Shipping • Transportation Systems • Government Facilities 15National Strategy to Combat Weapons of Mass Destruction, 2002 16National Infrastructure Protection Plan, 2009

20. Informing Homeland Security Strategy Through Gaming Theory Critical Infrastructure • Agriculture & Food • Defense Industrial Base • Energy • Healthcare and Public Health • National Monuments and Icons • Banking and Finance • Water • Chemical Plants • Commercial Facilities • Critical Manufacturing • Dams • Emergency Services • Nuclear Reactors, Materials, & Waste • Information Technology • Communications • Postal and Shipping • Transportation Systems • Government Facilities By itself, CI is not destructive. Only through subversion may CI become destructive. Subversion means degrading, destroying, or diverting the intended CI function or capability. Some CI, even if subverted, will not pose a macroterrorism danger, and for that reason, will be removed from further consideration.

21. Informing Homeland Security Strategy Through Gaming Theory Macroterrorism Risk Model Terrorists are Agents who seek to harm innocent civilians. Terrorists must acquire Weapons or Materials to achieve their means. Materials must be manufactured into weapons. Terrorists may choose Targets that indirectly affect civilians. Terrorists may choose to Target civilians directly.

22. Informing Homeland Security Strategy Through Gaming Theory MRM Analysis: Motive Weapons Selection: Can government policies be directed to influence terrorists’ weapons selection to less destructive means?

23. Informing Homeland Security Strategy Through Gaming Theory MRM Analysis: Opportunity CI Investment: Can government policies to make CI less vulnerable (i.e., “failsafe”) reduce the threat of catastrophic attack, and at what cost?

24. Informing Homeland Security Strategy Through Gaming Theory MRM Analysis: Means Government Targeting: Is it better for the government to pursue terrorists or their means of attack?

25. Informing Homeland Security Strategy Through Gaming Theory Thesis Proposal Conduct GT Analysis of HSS Problems • Motive. Can homeland security policies governing availability and access to CBRN materials and weapons affect terrorists’ motives regarding their deployment? • Opportunity. Can homeland security policies expediting development of failsafe CI reduce the threat of catastrophic attack, and at what cost? • Means. Should homeland security policies focus more on terrorists, weapons, or targets? Which strategy would most stress the capabilities of terrorists, forcing them to withdraw from plans to conduct catastrophic attacks, versus actions that would encourage them to conduct catastrophic attacks?

26. Informing Homeland Security Strategy Through Gaming Theory Conclusion • 9/11 opened eyes to threat of macroterrorism by small groups or individuals. • CI joined the ranks of WMD. • HSS can benefit from game theoretic analysis of macroterrorism problems. • Denial Topoi and Macroterrorism Risk Model identify three immediate areas of potential analysis. • Propose solving these problems to better inform HSS.

27. Informing Homeland Security Strategy Through Gaming Theory Questions?