Defending against terrorist attacks with limited resources

This paper develops a framework for analyzing a defender's allocation of scarce resources against 'a strategic adversary like a terrorist group in four settings: (1) a baseline case in which the sites the defender tries to guard are independent in that resources dedicated to protecting one site have no effect on any other site; (2) if the defender can also allocate resources to border defense, intelligence, or counterterrorist operations which, if successful, protect all of the sites; (3) if threats have strategic and nonstrategic components (e.g., the threat to public health from bioterror attacks and the natural outbreak of new diseases); and (4) if the defender is unsure of the terrorists' preferred targets. The analysis characterizes the defender's optimal (equilibrium) allocations in these settings, an algorithm or approach to finding the optimal allocations, and relevant comparative statics. These characterizations provide a general way of thinking about the resource-allocation problem in these settings.