A two-period model of counterterrorism with terrorist sponsoring and the role of hatred

• Two-period model analyzes counterterrorism vs. hatred-induced terrorist sponsorship. • Sponsorship proportional to terrorist resources raises government efforts in both periods. • Hatred case yields U-shaped terrorist resources in counterterrorism costs and asset valuations. • Government counterterrorism inverse V-shaped in hatred proportionality parameter. • Balances resource degradation against long-term sponsorship escalation risks. A two-period counterterrorism model is developed. One special case without terrorist sponsoring enables the government to degrade the terrorist’s resources substantially, especially with low unit counterterrorism cost or high asset valuations. If the terrorist in a second special case is sponsored proportionally to its resources, the government increases its counterterrorism in both periods, even at a higher unit cost. Degrading the terrorist’s resources becomes more challenging. If the terrorist in a third special case is sponsored proportionally to the government’s counterterrorism, due to developing hatred, and proportionally to its resources, counterterrorism is high in both periods, even at a high unit cost. Two contrasts with the two other special cases are that the terrorist’s resources are U shaped in both the government’s unit counterterrorism cost and their asset valuations. Both low unit counterterrorism cost and high asset valuations cause high counterterrorism and substantial terrorist sponsoring due to hatred. The government’s counterterrorism is inverse V shaped in the proportionality parameter for how counterterrorism causes hatred and terrorist sponsoring. An intermediate parameter causes maximum counterterrorism where the government strikes a balance between degrading the terrorist’s resources while constraining terrorist sponsoring due to hatred. The three special cases illustrate the government’s counterterrorism dilemmas.