Public Warnings in Counterterrorism Operations: Managing the 'Cry-Wolf' Effect when Facing a Strategic Adversary

Public warnings have the potential to be a powerful tool to mitigate the threat from terrorism: the public is alerted, and in response, the terrorist may defer or deflect his attack. Paradoxically, warnings can be a victim of their own success. The absence of an attack may be misconstrued by the warning recipients as a false alarm, leading to warning fatigue and a dampened response to future warnings -- also referred to as the "cry-wolf" effect. To capture this phenomenon, we model the interaction between the defender and the terrorist using a dynamic game-theoretic framework. We find that a more effective warning shifts emphasis from the direct benefit of mitigating losses from an attack, to the indirect benefit of inducing the terrorist to defer his attack to a later time. We examine the implications of this finding in the context of defending a single location, and two locations. For instance, we find that the frequent occurrence of false alarms does not necessarily imply political gamesmanship; an increase in the terrorist's readiness can result in a lower frequency of terrorist attacks; issuing a joint warning across two locations can be optimal even when the asymmetry in their vulnerability is high. Our results clarify conventional wisdom, and hence, have important policy implications.