Abstract
Public officials are constantly facing decisions under risk, particularly in digitalization policies, the consequences of which are hard to predict given their multiple dimensional nature. Since scholarly research has not yet addressed this phenomenon, we do not know what influences the risk preferences of politicians in digitalization policies. Prospect theory—widely used to explain political decisions—can help us describe politicians’ potential risk references and the conditions affecting their decisions. Accordingly, this paper aims to answer the following question: what are the conditions affecting the risk preferences of politicians in digitalization policies? I address this question by employing two important assumptions of prospect theory: the value function and the probability weighting function. Particularly, I discuss the effects of loss/gain frames and probability weighting on the risk preferences of politicians in digitalization with outcomes in multiple dimensions (e.g., data privacy and economy). I argue that whether an outcome is perceived as a gain or as a loss depends on how the situation is framed and how the probabilities are weighted. I conclude with a brief discussion of how prospect theory can leverage our understanding of political decisions in highly complex policy environments.
Highlights
The emergence of digital technologies is pushing public officials at the national and subnational levels to increasingly deal with decisions involving digitalization—broadly defined as the use of information and communication technologies (ICTs) to alter or adopt processes [1]—of key areas such as healthcare
This has created a new and uncertain landscape for political decision-making. This is largely because it is difficult to predict whether the outcomes of digitalization are positive or negative [2] given its multidimensional nature: while some of the outcomes in digitalization are associated with the economic dimension, the impacts on jobs [3,4], others fall within the cybersecurity dimension, especially data privacy [5]
Given the increasing complexity of issues in many countries around the world, especially those involving the digitalization of economies and societies, it becomes paramount to study the conditions influencing the risk preferences of politicians
Summary
The emergence of digital technologies is pushing public officials at the national and subnational levels to increasingly deal with decisions involving digitalization—broadly defined as the use of information and communication technologies (ICTs) to alter or adopt processes [1]—of key areas such as healthcare. This has created a new and uncertain landscape for political decision-making. This is largely because it is difficult to predict whether the outcomes of digitalization are positive or negative [2] given its multidimensional nature: while some of the outcomes in digitalization are associated with the economic dimension, the impacts on jobs [3,4], others fall within the cybersecurity dimension, especially data privacy [5]. Research on digitalization has been concerned with digital technology for citizenship and political participation [7], information technologies (e-government) adoptions [8,9], public sector efficiency [10], smart government [11,12], and public administration and big data [13]
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