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Deterrence has been a crucial element in fighting terrorism, both in actual politics and rational choice analyses of terrorism. But there are superior strategies to deterrence. One is to make terrorist attacks less attractive. Another to raise the opportunity cost - rather than the material cost - to terrorists. These alternative strategies effectively dissuade potential terrorists. The strategies suggested here build on the "benevolence" system and tend to produce a positive sum game among the interacting parties. In contrast, the deterrence system is based on "threats" and tends to produce a negative sum game interaction.
Frey et al. (Fri,) studied this question.