Assessing, Managing and Benefiting from Global Interdependent Risks: The Case of Terrorism and National Disasters

  title={Assessing, Managing and Benefiting from Global Interdependent Risks: The Case of Terrorism and National Disasters},
  author={Howard Kunreuther and Erwann O. Michel‐Kerjan},
With the increasing globalization of economic and social activities, the world has now become so interdependent that actions taken today 5,000 miles away could affect you tomorrow. Conventional wisdom holds that one country or one organization has the capacity and expertise to manage future large-scale risks alone. However, in an increasingly global interdependent world, they have neither. A hallmark of the 21 century is that we have entered a new era of catastrophic risks, as illustrated by… 

Figures and Tables from this paper

Terrorist Activities and Economic Development in Nigeria: An Early Warning Signal
This paper examines the implications of terrorist activities on economic development in Nigeria. The series of challenges associated with terrorism, revolution, different forms of strike actions,
Assessment of Damage Risks to Residential Buildings and Cost–Benefit of Mitigation Strategies Considering Hurricane and Earthquake Hazards
Damage to residential buildings in the United States caused by hurricanes, earthquakes, and other natural hazards is significant. Economic losses average approximately $5.4 billion annually from
Internalization of Externalities in Interdependent Security: Large Network Cases
This work establishes an interesting relation between the local minimizers of social cost and the Nash equilibria of a population game with slightly altered costs and shows how the degree distribution of agents influences their security investments and overall security at both the NEs of population games and social optima.
Effects of Degree Correlations in Interdependent Security: Good or Bad?
  • R. La
  • Computer Science
    IEEE/ACM Transactions on Networking
  • 2017
It is shown that there exists a unique pure-strategy Nash equilibrium of a population game and it is demonstrated that as the agents with larger degrees in the dependence graph see higher risks than those with smaller degrees, the overall network security deteriorates in that the ARE experienced by agents increases and there are more attacks in the network.
Learning the structure and parameters of large-population graphical games from behavioral data
This work considers learning, from strictly behavioral data, the structure and parameters of linear in uence games (LIGs), a class of parametric graphical games introduced by Irfan and Ortiz (2014), and casts the learning problem as maximum-likelihood estimation (MLE) of a generative model defined by pure-strategy Nash equilibria (PSNE).
Causal Strategic Inference in Social and Economic Networks
of the Dissertation Causal Strategic Inference in Social and Economic Networks


How Does the Corporate World Cope With Mega-Terrorism? Puzzling Evidence from Terrorism Insurance Markets
Terrorist attacks that have succeeded abroad since 2001, as well as others that were prevented, indicate that the threat of a large-scale attack is real and will be with us for a long time. Focusing
Evaluating the Effectiveness of Terrorism Risk Financing Solutions
The 9/11 attacks in the United States, as well as other attacks in different parts of the world, raise important questions related to the economic impact of terrorism. What are the most effective
New Challenges in Critical Infrastructures : A US Perspective
The emergence of a larger threat spectrum -terrorism, sabotage, local conflicts, political unrest, and natural disasters- combined with the growing globalization of economic activities, makes
Seeds of Disaster, Roots of Response: Interdependent Security in Interconnected Networks
In an interdependent world, the risks faced by any individual, firm, region, or country depend not only on its own choices but also on those of others. In the context of terrorism, the risks faced by
The Economic Impacts of Terrorist Attacks
Contents: Preface 1. Introduction Harry W. Richardson, Peter Gordon and James E. Moore II 2. Transnational Terrorism: An Economic Analysis Todd Sandler and Walter Enders 3. You Can Only Die Once:
The Economic Impact of a Terrorist Attack on the Twin Ports of Los Angeles—Long Beach
Because of its size, visibility and diversity, the Los Angeles metropolitan region is a prime target for a terrorist attack. There are many specific targets, the Los Angeles International Airport
The Resilient Enterprise: Overcoming Vulnerability for Competitive Advantage
What happens when fire strikes the manufacturing plant of the sole supplier for the brake pressure valve used in every Toyota? When a hurricane shuts down production at a Unilever plant? When Dell
A Risk and Economic Analysis of Dirty Bomb Attacks on the Ports of Los Angeles and Long Beach
Analysis of possible terrorist attacks on the ports of Los Angeles and Long Beach using a radiological dispersal device (RDD) to shut down port operations and cause substantial economic and psychological impacts suggests that the chances of a successful dirty bomb attack are about 10-40% and high radiological doses are confined to a relatively small area.
The Ecology of Terror Defense
We draw on an ecological metaphor to analyze terror defense by governments and individuals. Governments can combat terror in part by targeting what we call the "stock of terror capacity" accumulated
Seeds of Disaster, Roots of Response: How Private Action Can Reduce Public Vulnerability
Foreword General Robert T. Marsh Part I. Seeds of Disaster: 1. Where private efficiency meets public vulnerability: the critical infrastructure challenge Philip Auerswald, Lewis M. Branscomb, Todd M.