Why concessions should not be made to terrorist kidnappers

Brandt, Patrick T.; George, Justin; Sandler, Todd

doi:10.1016/j.ejpoleco.2016.05.004

Cited by 61 publications

(36 citation statements)

References 17 publications

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“…These factors are interrelated and also influence attacker behavior. For example, in the context of kidnappings by terrorists it has been verified based on incident data that negotiating with kidnappers and making concessions encourages substantially more kidnappings in the future [6]. We would expect a similar effect in the context of ransomware, where independently acting organizations who are standing with the "back against the wall" have to make decisions about ransom payments to get operations going again, or to swallow the bitter pill of rebuilding from scratch and not giving in to cybercriminals.…”

Section: Discussionmentioning

confidence: 99%

On the Economics of Ransomware

Lászka¹,

Farhang²,

Großklags³

2017

Lecture Notes in Computer Science

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While recognized as a theoretical and practical concept for over 20 years, only now ransomware has taken centerstage as one of the most prevalent cybercrimes. Various reports demonstrate the enormous burden placed on companies, which have to grapple with the ongoing attack waves. At the same time, our strategic understanding of the threat and the adversarial interaction between organizations and cybercriminals perpetrating ransomware attacks is lacking.In this paper, we develop, to the best of our knowledge, the first gametheoretic model of the ransomware ecosystem. Our model captures a multistage scenario involving organizations from different industry sectors facing a sophisticated ransomware attacker. We place particular emphasis on the decision of companies to invest in backup technologies as part of a contingency plan, and the economic incentives to pay a ransom if impacted by an attack. We further study to which degree comprehensive industry-wide backup investments can serve as a deterrent for ongoing attacks.

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Section: Discussionmentioning

confidence: 99%

On the Economics of Ransomware

Lászka¹,

Farhang²,

Großklags³

2017

Lecture Notes in Computer Science

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“…Although Brandt and Sandler (), Brandt et al (), and our study are the only ones empirically analyzing the impact of negotiations on terror, our article is also related to Gaibulloev and Sandler () and Santifort and Sandler (), who investigate factors determining successful terror attacks from the point of view of terrorists. Gaibulloev and Sandler (), for instance, show that negotiation success increases with the relative disagreement values and relative bargaining strengths of the terrorists.…”

Section: Relation To the Literaturementioning

confidence: 91%

“…In our benchmark model, we find evidence of a positive effect of negotiation success on the number of terror events up to a critical threshold. In light of Brandt et al (2016)'s findings, this is noteworthy because, in contrast to the aforementioned studies, we account for heterogeneity at the country level as well as the endogeneity of the negotiation rate. More specifically, we find an inversely U-shaped relation between terror attacks and negotiations, that is, terror increases for low negotiation rates but decreases for high negotiation rates.…”

Section: Introductionmentioning

confidence: 96%

Negotiating with Terrorists: The Costs of Compliance

Arın

Feess

Kuhlenkasper

et al. 2019

Southern Economic Journal

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It is often argued that negotiating with terrorists will encourage terrorist attacks. To date, corroborating empirical evidence is scarce. Using ITERATE data, we investigate the impact of conceding to terrorist demands on terror activity. We restrict attention to hostage events with clear‐cut demands from terrorists. Our sample period runs from 1978 to 2005 and comprises 1435 events in 125 countries. Estimating a flexible and dynamic Structured Additive Regression model, we find that the percentage of successfully negotiated events has a nonlinear effect on future terror intensity consistent with our simple theoretical model. More specifically, although moderate rates of negotiation increase the number of future terror events, higher negotiation rates tend to have the opposite effect. The estimated threshold is around 20%.

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“…Mortality rates for hostages from "noconcessions" nations are high. Governments that prioritize life preservation do achieve safe releases, but at escalating prices (New York Times, 2014)-encouraging further kidnaps (Brandt & Sandler, 2009;Brandt, Sandler, & George, 2016).…”

Section: Gove Rne D Ver S Us Ung Over Ned K Id Nap M Ark Etsmentioning

confidence: 99%

Governing criminal markets: The role of private insurers in kidnap for ransom

Shortland

2017

Governance

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The intersection between the formal and criminal economies presents a range of intractable coordination and enforcement problems. Who orders and facilitates the interactions between private, legal entities, and criminals (potentially) engaged in kidnap for ransom? I analyze the contracts, protocols, norms, and agencies created by insurers to govern this unusual market. Stringent insurance contracts, effective security measures, and orderly resolutions create a profitable market for kidnap insurance. Underwriters manage moral hazard and adverse selection. Business risk consultancies minimize the kidnapping of insured workers, high‐net‐worth individuals, and travellers. Crisis responders ensure that hostages are treated well, keep ransoms moderate and stable, and discourage kidnappers from reneging on agreed ransoms. The state, private sector, and mafias incentivize cooperation and enforce contracts. Understanding this complex polycentric governance architecture is crucial for remedying current trends in “terrorist” kidnap for ransom.

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Why concessions should not be made to terrorist kidnappers

Cited by 61 publications

References 17 publications

On the Economics of Ransomware

On the Economics of Ransomware

Negotiating with Terrorists: The Costs of Compliance

Governing criminal markets: The role of private insurers in kidnap for ransom

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