Ideas to take away

It will take a long time to work out the implications of everything that we have learned about human decision-making over the past three or four decades. In some areas, results continue to be published at faster rates than ever before. We may even miss some of the implications for the very reasons revealed and explained by this research! We started out, some time ago, to work through the narratives that could be built about terrorist decision-making from unorthodox applications of orthodox economics (e.g. Phillips 2009, 2013; Phillips & Pohl 2012). This has led us in some interesting and unanticipated directions because we have tried to keep an open mind or, more formally, we have tried to embrace methodological diversification. We added behavioural economics and set the reference point as the trigger for copycat behaviour. And we added the law enforcement and counter-terrorism decision-making processes to our list of things to analyse and, more recently, the information gathering and processing tasks that are undertaken by counter-terrorism and intelligence agencies. In the long history of terrorism studies, the connections between investigative psychology, psychology, economics, decision science and criminology wax and wane but new connections are always being formed. In some terrorism studies researchers have possibly been dismayed to see the ‘avalanche’ of new authors and new work tumble through or over ‘their’ field. We say, on the contrary, that there has never been a more exciting time. We end with a list of patterns and their roots in economics and decision theory. This is only the beginning of what we envisage to become a dynamic decision framework that can be applied to pre-empting and pursuing perpetrators.

  • 1. Terrorists, being sensitive to changes to their resources and the resources required for particular attack types, will switch from one attack type to another under certain circumstances (neoclassical consumer decision theory],
  • 2. If terrorists have expended considerable effort on their terrorist identity, including by certain signature attack methods, they will be very, very stubborn and exceedingly difficult to negotiate with |loss aversion and the endowment effect].
  • 3. All actors in the terrorism context display some degree of loss aversion that leads them to take more risk when they face losses [prospect theory|.
  • 4. All actors in the terrorism context are prone to overweight unlikely outcomes and underweight more likely outcomes. This can distort the terrorists’ preferences for attack types and locations just as easily as it can disrupt the ordering of suspects for a terrorism watch list [probability weighting and prospect theory |.
  • 5. Decision-makers assess outcomes against at least one reference point. For a terrorist group or a school shooter, this could be the number of victims associated with a rival or predecessor. For a counter-terrorism taskforce, this could be the recent successes of a rival taskforce [reference points and prospect theory].
  • 6. Terrorists combine attack methods. This is a basic yet overlooked fact. The implications are stark. Terrorists generate higher expected outcomes (however measured) while bearing less risk than has been considered previously [modern portfolio theory].
  • 7. Even naive diversification works in the sense just described but terrorist groups can gain greater ‘efficiency’ by using some information about correlations. If that sounds unbelievable, then we could say that terrorists allocate their resources to various goals. As it happens, if they do this, they are likely to choose as efficiently as predicted by the orthodox model [behavioural portfolio theory and mental accounting!.
  • 8. The terrorists’ share of payoffs is important to their survival, not their absolute payoffs.There is no need to use more resources once the nearest rival has been shaded out. Competition for share leads to spirals in terrorist activity [evolutionary game theory].
  • 9. Expected utility is a measuring tool that can be used to measure terrorists’ preferences.The terrorist’s utility accelerates quickest at lower payofflevels and then declines. Even though it is a prescriptive model, many people choose in accordance with its prescriptions, initially or following feedback and further deliberation |expected utility theory].
  • 10. Information cascades can start very easily and as early as the third decision-maker. It can influence suspect prioritisation and other aspects of an investigation. They can also flow across jurisdictions [information cascades].
  • 11. The communication of ideas across fields of study and from the research community to practice and back again are subject to all of the decision-making biases that we have explored [information, heuristics and biases|.
  • 12. The everyday of policing and counter-terrorism is often overlooked in research that concentrates on big events, such as a hostage situation. Everyday law enforcement is not untouched by technology and innovation. When these innovations involve decision-making processes during development, operation, interpretation and implementation, their surface objectivity may be a mirage |heuristics and biases in everyday decision-making].

For those in search of useful ideas there has never been a better time for it. Within economics, behavioural economics is no longer the quirky cousin that nobody wants to dance with. Nor is it the case that ‘mainstream’ economics, perhaps the most misused term in the social sciences given the numerous competing schools of thought that constitute the orthodoxy, has been sent on its way. There has been a gelling of the two. This makes complete sense once one realises that the different models each capture something of the human decision process and the context in which decisions take place and each can be put to a different purpose. For one purpose, it is best to use expected utility theory. For another, prospect theory. For another, SP/A theory. For another, one of the orthodox generalisations of expected utility theory. And so on.The challenge is to search for the right model for the right purpose with an open mind.

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