The Economics of Terrorism and Social Media

This chapter provides an overview of the economics of terrorism and social media. Recent advances in the economics of information and economics and psychology help summarize the literature on how terrorism and social media interact. I discuss the implications of the transition from mass media to social media for terrorism in general before describing the impact of social media on the industrial organization of terrorism in particular. I also summarize recent work on the impact of terrorism on social media as well as the economics and psychology of national security have provided some solutions. Overall, social media has been an important part of the industrial organization of terrorism as well as its undoing where progress has been made. What we do not know (but ought to know) include topics such as how social media strengthens or weakens anti-terrorism initiatives given newer developments such as encryption and whether or not terrorist cyber-attacks may increase in importance over time as social media grows in scale.