Terrorism, Skyjacking

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Terrorism, Skyjacking Embezzlement

• Foreign and Domestic

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Also Google Fortunate 400
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The fortunate 400 control 1.15 of nations
income, twice the share they had in 1995. Their
average tax Rate has fallen from 30 to 18
following the capital gains tax rate
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Points About Terrorism

• Definition The killing and injuring of innocent
  civilians for political purposes
• The perceived threat from foreign terrorists to
  the USA (at home) is relatively new (since 9/11)
• Earlier skyjackings in the US were not by
  terrorists
• Terrorism has been a threat since World War II in
  Europe, much of it connected to the Middle East
• We can learn from comparing the US reaction to
  skyjacking, and attempts to control it

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Imad Mugniyah Newsweek Feb 25, 08
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http//www.lapdonline.org/crimemap
100 Universal City Plaza Universal City 91608
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Post 9-11

• Attack
• what
• how
• where
• when
• why? Why dont our enemies love us?

• Defense (focus)
• what
• how
• where
• when
• why were we not prepared for the attack?

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US Wars

• Domestic (over here)
• independence
• 1812
• Civil

• Foreign (over there)
• Mexico Halls of Moctezuma
• Spanish San Juan Hill Manila Bay
• WWI France
• WWII North Africa, Europe, Pacific
• Korea
• Vietnam
• Gulf Desert Storm
• Afghanistan and Iraq

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Why were we not Prepared?Theme 1 Over there
Chorus
Over there, over there,
Send the word, send the word over there -
That the Yanks
are coming,
The Yanks are coming,
The drums rum-tumming
Ev'rywhere.
So prepare, say a
pray'r, Send the
word, send the word to beware.
We'll be over, we're coming over,
And we won't come
back till it's over
Over there.
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Americas Best Known World War I Song

• Over there, over there, send the word, send the
  word over there, that the yanks are coming, .

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Terrorism in the USA

• Home grown
• Foreign imports
• Remedies

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Over There

• There have not been very many politically
  motivated attacks by foreign terrorists on the
  domestic USA until 9-11
• World Trade Center ( Feb. 26, 1993)

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Learning from History

• Skyjacking in the USA
• first in the USA was 1961
• in contrast to skyjackings abroad, at most one
  skyjacking at home was, maybe, politically
  motivated by a someone with connections to the
  Balkans

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Learning from Economics

• Thwarting embezzlement
• inspection, I. E. audit

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Recent History of US Terrorism

• Bombings
• World Trade Center, New York
• 6 killed, 1000 injureed
• Murtaugh Federal Building, Oklahoma City
• Black Churches
• Skyjackings

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WTC 1993
Blackhawk Down 1993
Saudi Arabia 1996
Africa 1998
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USS Cole 2000
9/11
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Reward 2,000,000
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http//news.bbc.co.uk/onthisday/hi/dates/stories/f
ebruary/26/newsid_2516000/2516469.stm
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Facts My Lecture 7 On Corrections Bureaucracy
corrected
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Total International Terrorist Attacks
http//www.state.gov Office of the
Coordinator for Counter-Terrorism Patterns of
Global Terrorism
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Note The Small of Attacks in North America
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Shock value Of 9/11 Few attacks In North America,
but Many Casualties
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Skyjackings

• The first skyjacking was a Peruvian carrier in
  February 1931
• The first skyjacking of a US carrier was a
  National Airlines flight destined for Key West
  Florida on May 1, 1961

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The Legend of D. B. Cooper
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US Response to Domestic Skyjackings

• Armed Federal Marshals on Flights
• mostly on flights on the Eastern seaboard
  corridor
• Congress Passes the US Civil Aviation Security
  Program in 1973

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Model of US Skyjackings and Bomb Threats
Terrorism
Foreign Skyjackings
US Skyjackings
2 Year Lag
Bomb Threats to US Aircraft
Inspection
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Borch Model of Inspection

• Two actors
• employee(embezzler) firm
• skyjacker airport security
• Two sets of values or payoffs to the outcomes
• No dominant strategy for either actor
• Need to keep your adversary guessing
• Embezzlers expected outcome break even
• Firms expected outcome dead-weight cost of
  inspection

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Defense Against Embezzlement and Skyjacking
I. Options for choice States of the world
Firm
No
Audit
E ??A
E ??Â
Embezzle
Employee
Ê ??A
Ê ??Â
Not
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Defense Against Embezzlement and Skyjacking
II. Valuation of the options, i.e. choices A.
Payoffs to the employee
Audit
No
- ?
G
Embezzle
0
0
Not
B. Payoffs to the firm
Audit
No
- C
- L
Embezzle
- C
0
Not
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Circular Contest

• Best outcome for the employee
• embezzle and no audit
• Best outcome for the firm
• no embezzling and no audit
• Worst outcome for the employee
• embezzle and get audited
• Worst outcome for the firm
• dont audit and get embezzled

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Payoff to the Firm
Ê ??Â

-
Payoff to the Employee
-
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Payoff to the Firm
Ê ??Â

-
Payoff to the Employee
- C
Ê ??A
-
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Payoff to the Firm
Ê ??Â

-
- ?
Payoff to the Employee
- C
E ??A
Ê ??A
-
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Payoff to the Firm
Ê ??Â

-
- ?
G
Payoff to the Employee
- C
E ??A
Ê ??A
- L
E ??Â
-
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Payoff to the Firm
Ê ??Â

-
- ?
G
Payoff to the Employee
- C
E ??A
Ê ??A
- L
E ??Â
Probability of audit 1
-
Probability of Audit 0
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Firm Can Choose A Probability Of Audit Between 0
and 1

• If PA 1, then employee loses - ?
• If PA 0, then employee gains G
• How about a probability between 0 and 1 like G/(
  ?? G)

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Payoff to the Firm
Ê ??Â

-
- ?
G
Payoff to the Employee
- C
E ??A
Ê ??A
- L
Probability of audit 1
E ??Â
-
Probability of Audit 0
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Defense Against Embezzlement and Skyjacking
Keep Your Adversary Guessing Expected Payoff to
the employee
Audit PA
No 1 - PA
- ?
G
Embezzle PE
0
0
Not 1- PE
PE PA(- ?) PE(1 - PA) G 0 No Incentive PA(-
?) PA(- G) G 0 PA( ? G) - G PA G /
(?? G)
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Reaction Curve of the Employee to the Firm
1.0
PE
0
1.0
PA
G/( ?? G)
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Reaction Curve of the Employee to the Firm
1.0
PE
0
1.0
PA
G/( ?? G)
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Reaction Curve of the Employee to the Firm
1.0
PE
0
1.0
PA
G/( ?? G)
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Reaction Curve of the Firm to the Employee VF
PEPA(-C) (1-PE)PA(-C) PE(1-PA)(-L)
1.0
PE
C/L
0
0
PA
1.0
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Reaction Curve of the Firm to the Employee VF
PEPA(-C) (1-PE)PA(-C) PE(1-PA)(-L)
1.0
PE
C/L
0
G/(GP
0
PA
1.0
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Post 9-11

• Attack
• what
• how
• where
• when
• why? Why dont our enemies love us?

• Defense (focus)
• what
• how
• where
• when
• why were we not prepared for the attack?

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References

• State Department Counterterrorism Office
• http//www.state.gov/s/ct/rls/c14813.htm
• Patterns of Global Terrorism 2003
• Appendix G
• Country Reports on Terrorism 2004
• FBI
• http//www.fbi.gov/publications.htm
• The FBIs Counterterrorism Program Since 2001

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X
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Dorothy Toto, I've a feeling we're not in
Kansas anymore.
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See Ya (March 20)
http//www.pianocaruso.de
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