Competitive Research- Freakonomics Style

Last Updated Aug 20, 2007 4:34 PM EDT

Yesterday the blog Freakonomics.com, by Steven D. Levitt and Stephen J. Dubner authors of the wildly popular book of the same name, moved to a new home at the New York Times. Unless you've been living in a cardboard box in Siberia the last few years, you know that the book (which sold over 3 million copies) and the blog train the tools of economics on problems outside the traditional boundaries of the discipline.

Today's post by Levitt goes way outside those boundaries to ask: "If You Were a Terrorist, How Would You Attack?" Levitt runs this thought experiment on himself and concludes:

  1. I'd start by thinking about what really inspires fear. One thing that scares people is the thought that they could be a victim of an attack... Humans tend to overestimate small probabilities, so the fear generated by an act of terrorism is greatly disproportionate to the actual risk.
  2. I'd want to create the feeling that an army of terrorists exists, which I'd accomplish by pulling off multiple attacks at once, and then following them up with more shortly thereafter.
  3. Unless terrorists always insist on suicide missions (which I can't imagine they would), it would be optimal to hatch a plan in which your terrorists aren't killed or caught in the act, if possible.
  4. I think it makes sense to try to stop commerce, since a commerce breakdown gives people more free time to think about how scared they are.
  5. If you really want to impose pain on the U.S., the act has to be something that prompts the government to pass a bundle of very costly laws that stay in place long after they have served their purpose (assuming they had a purpose in the first place).
Keeping these considerations in mind, Levitt outlines one scenario law enforcement may need to plan for. "My general view of the world is that simpler is better," he notes, and then suggests a plan similar to the Washington area sniper attacks of 2002, but spread across the country. "No one will know when and where the next attack will be," he says, which of course would accomplish the terrorists' supposed goal of maximizing terror for minimal expenditure of resources.

Beyond the creepy fascination of looking into the mind of a terrorist (and the intriguingly offbeat look inside Levitt's brain as well), what's the point for managers. Competitive research. Strange as this particular version may be, Levitt is essentially evaluating an opponent, trying to understand both our own and their strengths, weaknesses and personalities, to better foresee and plan for likely next moves and counteract them -- exactly the sort of analysis a business needs to do to formulate an effective corporate strategy.

  • Jessica Stillman On Twitter»

    Jessica lives in London where she works as a freelance writer with interests in green business and tech, management, and marketing.