• Corpus ID: 154454012

The Economics of Security Externalities Assessing, Managing and Benefiting from Global Interdependent Risks

  title={The Economics of Security Externalities Assessing, Managing and Benefiting from Global Interdependent Risks},
  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… 
3 Citations

Figures and Tables from this paper

Cyber and Physical Infrastructure Interdependencies
The deficiencies of the existing methods in correlating cyber attacks with physical consequences are discussed, and a research plan is outlined to correct those deficiencies and result in a fully supported methodology to quantify the economic consequences of events that begin with cyber effects, cascade into other physical infrastructure impacts, andresult in degradation of the critical infrastructure's ability to deliver services and products.
Cost Effectiveness of On-Site Chlorine Generation for Chlorine Truck Attack Prevention
The on-site generation of chlorine or hypochlorite at all U.S. facilities currently receiving chlorine by truck is considered, as a means of preventing chlorine truck attacks, and the amount of chlorine shipped by truck in the United States and the cost of generating chlorine at each facility is estimated.


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
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 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
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
You Can Only Die Once: Interdependent Security in an Uncertain World
This chapter describes how there are certain bad events that can only occur once. Death is the obvious example: an individual’s death is irreversible and unrepeatable. More mundane examples are
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:
Interdependent Security
Do firms have adequate incentives to invest in protection against a risk whose magnitude depends on the actions of others? This paper characterizes the Nash equilibria for this type of interaction
179 “Insurance is a kind of game in which one needs to be extremely cautious. Chance must be analyzed, and players be skilled in the science of calculating probabilities; They need to foresee hazards
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