March 18, 2011
Concerns about terrorists smuggling nuclear bombs into the United States in container freight have led to demands for 100% inspection at either U.S. or foreign ports. However, under some circumstances, it may be possible to deter nuclear smuggling attempts with less than 100% inspection. Based on publicly available data, we quantify a game-theoretic model of terrorist decision making to understand the role of nuclear detection technologies in deterring nuclear terrorism. The results suggest that unless the defender imposes high retaliation costs on the attacker, 100% inspection is likely to be needed, and deterrence with partial inspection may not be achievable in practice even though it is possible in theory. On the other hand, when the defender can credibly threaten the attacker with costly retaliation, partial inspection may be sufficient to deter nuclear smuggling attempts. Sensitivity analysis of these results indicates that these observations are robust to assumptions about specific parameters in the model. Thus, for policy debates about how to prevent nuclear terrorism, consideration of the diplomatic stance on retaliation is as important as, or maybe even more important than, debate about the optimal percentage of containers to inspect.