@techreport{NBERw9215,
 title = "Insurance, Self-Protection, and the Economics of Terrorism",
 author = "Darius Lakdawalla and George Zanjani",
 institution = "National Bureau of Economic Research",
 type = "Working Paper",
 series = "Working Paper Series",
 number = "9215",
 year = "2002",
 month = "September",
 URL = "http://www.nber.org/papers/w9215",
 abstract = {This paper investigates the rationale for government intervention in the market for terrorism insurance, focusing on the externalities associated with self-protection. Self-protection by one target encourages terrorists to substitute towards less fortified targets.  Investments in self- protection thus have negative external effects in the presence of rational terrorists. Government subsidies for terror insurance can discourage self-protection and limit the inefficiencies associated with these and other types of negative externalities. They may also serve as a complement to a policy of publicly provided protection.},
}