Defending Against Terrorism, Natural Disaster, and All Hazards

This chapter considers both natural disasters and terrorism as threats. The defender chooses tradeoffs between investments in protection against natural disaster only, protection against terrorism only, and all-hazards protection. The terrorist chooses strategically how fiercely to attack. Three kinds of games are considered: when the agents move simultaneously; when the defender moves first; and when the terrorist moves first. Conditions are shown for when each type of agent prefers each kind of game. Sometimes their preferences for games coincide, but often their preferences are opposite. An agent advantaged with a sufficiently low normalized unit cost of investment relative to that of its opponent prefers to move first, which deters the opponent entirely, causing maximum utility for the first mover and zero utility to the deterred second mover, who prefers to avoid this game. When all-hazards protection is sufficiently cheap, it jointly protects against both the natural disaster and terrorism. As the cost increases, either pure natural disaster protection or pure terrorism protection joins in, dependent on which is more cost effective. As the unit cost of all-hazards protection increases above the sum of the individual unit costs, the extent of such protection drops to zero, and the pure forms of natural disaster protection and terrorism protection take over.