Game Theory contributions to Terrorism in Merchant Shipping: an Application to Port Security

This paper concerns merchant shipping security and proposes a game theory framework for modelling terrorism threats and counteractions. First, the security considerations associated with merchant shipping in the post 9/11 era are reviewed, as well as the main current issues in maritime security, and the approaches developed in the academic literature. It is argued that game theory is suitable to address such security issues and its contributions to counterterrorism in other security settings are reviewed. The purpose is to identify the relevance to merchant shipping security of concepts and insights developed in other security settings, and then accordingly apply them to the former. In this context, such a game theoretic model is applied to a port security setting, where “port”and “ship” targets must decide on the level of their security measures and their associated costs, in order to respond to a potential attack by terrorists. The interaction settings involve the actors, their available options, their preferences and strategic goals, and other important parameters and assumptions. Defensive measures and potential damages are associated with cost variables. The analysis considers on one hand the case where the targets decide independently about the deterrence measures each one will take, wishing to minimise its expected overall costs. This may result to an attack being diverted from one target to the other. On the other hand, the targets may reach defence measures decisions in coordination with each other, in order to achieve the game’s social optimum. In this case, the aim is the collective best, while the players’ actions may not be in their best private interests. Useful conclusions and suggestions are reached from such treatment of the subject through an appropriate numerical example.