When to Negotiate with Terrorists, Hijackers, and Kidnappers
Brian Gongol


The incentive to undertake a terrorist act can be expressed as an economic mathematical equation, in which the costs and benefits to terrorists and victims are summed to determine the terrorist's incentive to act. By evaluating how this equation is completed, victim parties (such as nation-states) can determine what their method for responding to terror attacks should be. Because terrorists are always inclined to act, the only effective response is for victim parties to randomly alternate among several responses, ranging from complicity with terrorist demands to brutal retaliation. Official public policy should always be "We don't negotiate with terrorists," but the only way to effectively discourage future attacks when they inevitably do happen is to respond erratically.

Establishing the Terror Equation

An assessment of the terror equation follows:
Incentive to undertake an act of terrorism (I) = Benefit to terrorists (Tb) + cost to victim (Vc) - cost to terrorist (Tc) - benefit to victim (Vb)
Note that I, the incentive to undertake an act of terrorism, is directly proportional to the impact of a given act of terrorism. Acts that net a significantly positive result for the terrorist are highly valued.

Vb, the benefit to the victim, will almost always remain zero. Some goodwill may be exhibited by the rest of the world on the occasion of an unprovoked attack (the attack on the World Trade Center, for instance, brought about almost universal worldwide signs of sympathy to the United States. (Note: "Victim" is used here in the broad sense of the victim party, whether a government, a nation-state, a business firm, or some other organization. The victims of "terrorism" are, by definition, groups, while the victims of "crimes" are individuals.)

Furthermore, Tc (the cost to the terrorists) is ordinarily influenced by macro factors beyond the particular policies of a given victim nation or firm, and is usually irrationally minimized by the terrorist actors. The concept of the poor, hopeless Palestinian suicide bomber personally oppressed by Israeli policies is belied by the reality that Hezbollah fighters are, on average, wealthier and better-educated than the Palestinian population at large. The fact that most of the fifteen Saudi hijackers involved in the September 11th attacks were from one of the Arab world's wealthiest nations is further anecdotal evidence that terrorists do not undertake what most of us would consider a rational analysis of personal costs.

Thus, the only way to minimize the incentive to undertake a terrorist act is to either minimize the remaining factors (Tb, the benefit to the terrorist, and Vc, the cost to the victim) or to completely disrupt the calculation of both values.

Responding to Terrorist Acts

The natural goal of victims (whether they're nations, coalitions of nations, business firms, or other groups) is to minimize the frequency of terror events. Following is an abbreviated list of responses to terror events, and the likely results of those responses:

Conditions Response Rationale and Outcomes
Under a normal state of equilibrium, before any particular terrorist event occurs Official policy should be no negotiation ever with terrorists If any policy lets on even the slightest inclination that the terrorist party may gain something from carrying out violent acts, the terrorists can make a rational assumption that there will be some positive expected value to their action. When the terrorist assumes a low cost to himself (as when a committed ideological terrorist believes he will win entry to Paradise if he dies during an operation) and can expect a high likelihood of perceived benefit (as when nations or firms adopt policies of appeasement), then the nations adopting appeasement strategies can expect to be targeted for attacks. By lowering the expected value of any given attack by embracing a "no-negotiation" policy, nations and firms can, ceteris paribus, expect a lower frequency of attack.
After an attack occurs, if the event can be kept from public attention Victims should seek to minimize the amount of attention given to the attack Much of the expected benefit calculated by terrorists is in terms of public attention. By minimizing public attention paid to an attack (in the most favorable case, keeping the attack completely un-reported), the victim party can diminish the expected value calculated by the terrorist.
After an attack occurs, if the event cannot be kept from public attention (as will apply under most circumstances) When the event has already taken place and cannot be kept secret, the best choice for the victim party is to behave erratically from event to event The other party should always be given the impression that it owns an "out." If the expected value of any action, including the release of hostages or a peaceful resolution, falls to zero, the terrorist party can be expected to follow the route most directly advantageous to itself. This will ordinarily involve the most dramatic move possible, since most terrorist events are staged first and foremost for publicity value. So long as some "out" is offered, the victim party is best served by a policy of erratic behavior. By disrupting the terrorist party's calculation of expected benefit from the act, the victim party can reduce the potential scope and impact of future terrorist acts.
Under some circumstances, the demands of the terrorists should be granted This should happen infrequently, because if done too often it will increase the perceived probability in the terrorist's mind that his action will net the most positive possible outcome. Additionally, there is no certain benefit to granting terrorist demands; hostages are often killed regardless of ransoms paid or demands met (the Lindbergh baby, for instance), and terrorist groups are by no means obligated to act in good faith -- the very fact that they use terrorism as a method indicates that they are not of goodwill and cannot be trusted.
Under some circumstances, the demands of the terrorists should be granted, then reneged upon In granting demands, then reversing that cooperation, the victim party disrupts the sense of victory achieved by the terrorist party. Reneging on a supposed agreement destabilizes the terrorists' ability to calculate an expected value from future agreements.
Under some circumstances, the demands of the terrorists should be rejected outright Those directly victimized by these events will likely become casualties. This should not diminish the victim nation or firm's resolve to reject terrorist demands on some occasions. Following this policy will disrupt the terrorist's ability to anticipate the response by the victim party. The Philippine government has used this method with the Muslim rebels of Abu Sayyaf, and European nations publicly rejected Osama Bin Laden's "truce" offer in May 2004.
Under some circumstances, the terrorists should be immediately struck with brutal force This method will often result in casualties among individual victims. On the favorable side, it offers a sort of "no-nonsense" approach that appeals directly to the violent nature of terrorist calculations. The negative result, of course, is that it usually sacrifices some individual victims in pursuit of the policies of the victim party as a whole. The Russian responses to terrorist acts at a Moscow theater in 2002 and the Beslan schoolchildren's hostage crisis in 2004 reflected this method.
Under some circumstances, the terrorists should benefit from negotiation during the immediate confrontation, but later be struck directly, sometimes in very public manners, sometimes covertly Israel has practiced covert acts against terrorists through the Mossad for decades. This policy has drawn considerable criticism, though it is difficult to separate legitimate criticism of the policy from anti-Semitism. Other nation-states certainly use similar methods, though by their nature they are difficult to track.


Two important corollaries follow: Completing the Equation

Returning to our terrorism incentive equation:
I = Tb + Vc - Tc - Vb
We have seen above that no individual response consistently minimizes Tb and Vc (terrorist benefit and victim cost). Thus, there is no single policy which can be chosen consistently in order to minimize terror attacks.

Thus, we are left to only a single option: To assume that terrorists are greedy and will thus seek to maximize the impact of their work. Recall that I is the incentive to undertake a given terrorist attack, which is directly proportional to the impact of such an act. Increasingly significant attacks are increasingly preferable to the terrorist.

By disrupting the terrorist's calculation of I, victims and prospective victims can increase uncertainty for the terrorist. Increased uncertainty on the terrorist's behalf leads to increased safety for the prospective victim, since a disorganized attacker will cause less harm than a well-organized one.


It is and will remain impossible to completely remove the incentive to undertake terrorist attacks, so long as ideological forces cause prospective terrorists to under-value their own lives and safety in order to cause harm to their perceived enemies. While there is no single policy that will effectively apply to every act of terrorism, victims can secure the greatest possible level of security by randomly selecting from among all available responses. This random behavior disrupts the terrorists' ability to effectively calculate the value and impact of violent acts, which itself has a dampening effect on the undertaking of those violent acts as a whole.