6 - Cornering the Market: Counterterrorism in the Shadow of Group Formation

Summary

This chapter endogenizes a would-be militant group’s decision to enter the marketplace for violence. We show that an existing group may overproduce violence to corner the market and make its potential rivals calculate that recuperating their costs will be impossible. As a result, violence may be greater when we observe one group than when we observe many. We then investigate four ways in which a target government might mitigate the violence: offensive measures that undermine the lead group’s marginal cost of violence, defensive measures that absorb a portion of all violence, deterrent measures that increase the cost of group formation, and concessions to the group’s audience to reduce grievances. Of these, only specific types of defensive measures are guaranteed to decrease violence. In contrast, increasing the burden of entry and decreasing grievances can counterintuitively increase violence.