Terrorism and Game Theory Coalitions, negotiations and audience costs

iii Preface The decision to study Peace & Development and conducting my research into terrorism was primarily motivated by my experiences whilst carrying out research in Peru during the hostage situation of the Japanese Embassy in 1996 (initiated by the Moviemento Revolutionario de Tupac Amaru (MRTA)). Peruvians condemned the action, but sure, their manifesto was sound and true and the director (who was a hostage) of the research centre where I was working, spoke relatively highly of the hostage takers as being reasonable and moral people. I left pondering my stance if violence (n)ever could be legitimate and what I would do if I would be in their position. My research into 'terrorism' revealed that their struggle against unjust foreign domination through globalisation is only one of the myriad of possible causes. Despite taking a rational approach towards the topic by applying game theory to terrorism, which unmasked and clarified several aspects, many questions surrounding terrorism provide ample material for further research. I would like to take the opportunity to thank my supervisor Professor Edward Moxon-Browne for the lively discussions and his encouraging enthusiasm. Although the experimental game did not reveal answers I was looking for, they were great fun and opened up another intriguing complex issue of psychological game theory, therefore I thank the players iv Summary The aim of the research was to investigate theories of terrorism and its changes over time and apply this to game theory, in particular the concept of audience costs and coalition formation within the game theoretical framework. Causes and goals of terrorism were identified and modifications of ideas of terrorism in time observed, accompanied with an analysis of involved actors. Based on a premise of justification derived from the Just War theory, negotiations with aggrieved groups (terrorists) can be a rational approach to such type of protracted conflicts and uncovered dynamics based on the composition and character of organised actors. This includes averting the joint bargaining paradox when asymmetric actors cooperate to achieve a joint goal, governments who may fare better from their point of view when dividing up refugees into geographically separate areas to decrease the possibility of cooperation between aggrieved groups and recognising two-speed negotiations, which can have a (detrimental) effect on (deadline) negotiations. Secondly, an adaptation of the audience cost model explained the " war of nerves " of the terrorist theatre involving the generation of fear amongst its …