Home > foreign policy, Micro, perverse incentives, teaching > The Game Theory Explanation for Labeling of Terror Groups

The Game Theory Explanation for Labeling of Terror Groups

The new right wing meme seems to be that the Obama administration–specifically Hilary Clinton as Secretary of State–was too slow to label the group Boko Haram a terror organization.   I was just watching Michele Bachmann on CNN dismiss the argument, so this is unlikely to be the next “Benghazi”.  Still, just in case, let’s ask ourselves if it makes sense to label groups terror organizations early (early as in before clear acts of terror).

The question is whether of not extremist rhetoric in itself or clear acts of insurrection in themselves (i.e. acts  not clearly directed at civilians for the purpose of instilling terror among a population or sub-population)… whether or not such a group engaged in these activities ought to be labeled as terrorist by an outside group not directly involved in the conflict (such as the US concerning the conflict in Nigeria).

All that matters here is that some people will view the US here as a neutral party and some subset of those who do view the US as neutral might be swayed by the US’s designation of the Group (I don’t want to keep referring to them as Boko Haram because I want my argument to be more general than that).

Under these conditions this is how I see the problem:

  1. The Group has to weight the costs and benefits of its actions… the benefits are tough to quantify, since they involve the Group’s views on its goals and the probabilities of success moving toward those goals.  The costs are much easier to quantify, though:  public opinion, changes in funding and political support or changes in the military situation.
  2. The point I want to make is that if the US labels a group a “terror organization” that will specifically affect the Group’s calculus on the cost side of the cost-benefit calculation.   Specifically, a group so labelled almost certainly has fewer legitimate forms of funding and public support may suffer.

With these two assumptions it is clear to me that labeling such a group, then, can be  a kind of self-fulfilling prophecy.

In a backward-looking sense, the Group–so labelled–is certainly worse off.   Legitimate funding sources may dry up since many outsiders who sympathize with the group’s goals may hesitate to associate themselves with terrorists.  More than that, the US and Europe have used legal sanctions to shut down terror funding networks.

In a forward-looking sense, though, the Group is now much more likely to commit acts of terror.   After all, if the Group is weighing a tactic (say, kidnapping school-girls to sell into slavery) then that Group will view its costs for this action as lower since some of the penalties for the action have already been applied:  funding has already been constricted, at least some public opinion has already turned.

This is always and everywhere the problem with administering the punishment before the crime.   The crime itself becomes costless.   This is a consequence of the one-shot deviation principle–if the punishment phase of a repeated game is coming regardless of one’s own actions, then the best response is to play the best response to that punishment which is the stage’s Nash equilibrium.   So the only equilibrium of the game is the repeated stage-Nash outcome.    For those unfamiliar with repeated games, the stage-Nash outcome is the worst possible outcome without any possibility of cooperation.  That is, the game becomes a prisoner’s dilemma, over and over again.

It’s always tempting to think that preemptive penalties yesterday could have stopped today’s tragedies, but the under-appreciated cost of preemptive actions is the risk of causing those very tragedies.



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