Tiberiu Dragu. 2011. "Is There a Trade-off between Security and Liberty? Executive Bias, Privacy Protections, and Terrorism Prevention." American Political Science Review 105(1): 64-78.
Model:
- Privacy is given as exogenous.
- Terrorists maximize their utility with respect to terrorist activity a.
- Anti-terrorist agencies maximize their utility with respect to effort against terrorism e.
- The terrorist activity levels and the effort against terrorism jointly determine the probability of a successful terrorist attack.
- Solve the problem the way you would a Cournot problem.
Assumptions:
- Privacy shifts the best response functions.
- Increasing privacy decreases costs of attack for the terrorist. The marginal cost also decreases in privacy.
- Increasing privacy increases costs of attack for the anti-terrorist agency. The marginal cost also increases in privacy.
- The terrorist organizations costs increase in a and are convex.
- The anti-terrorist organization costs increase in e and are convex.
Results:
- The probability of a terrorist attack does not necessarily decrease when privacy decreases.
- The expected utility of the anti-terrorist agency always increases when privacy decreases, even if the probability of terrorist attack increases when privacy decreases.
