Public Warnings in Counterterrorism Operations: Managing the “Cry-Wolf” Effect When Facing a Strategic Adversary

Public warnings have the potential to mitigate the threat from terrorism: the public is alerted, and in response, the terrorist may defer 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 and examine its implications, we model the interaction between the defender and the terrorist using a dynamic game-theoretic framework. Our equilibrium results suggest that absent any political gamesmanship or incompetence, the prospect of false alarms can lead to either lengthy stretches of sustained warning, or more attacks at lower warning levels. Furthermore, we recommend that warnings and security deployment ought to be decoupled and treated as independent levers. By studying how the equilibrium shifts with changes to the parameter regime, we find that an increase in the terrorist’s “readiness” can result in a lower frequency of terrorist attacks; and a rise in the cost of issuing warnings can induce more frequent warnings. The e-companion is available at https://doi.org/10.1287/opre.2018.1721 .