The economics of fear: applications from the literature on the economics of terror

Fear is not a concept typically used in economics. This talk seeks to conceptualize the term ‘Fear’ in the economic context. To this end, reactions of people to perceived terror threats are discussed: It is shown how individuals change their behaviour in the market place, in the political arena, notably in their voting behaviour, and in judging fellow citizens of a different group in response to perceived terror threats or actual terror attacks.