Prospect theory and presidential elections: Two cases from Yugoslavia and Serbia

Abstract

Why do presidents in semi-presidential regimes sometimes call early elections? Is the behavior of incumbent presidents different from the behavior of presidential contenders when the former do not need to run for office but face the loss of parliamentary majority in a semi-presidential system? Prospect theory claims that agents make risky choices when facing a loss. Consequently, if incumbent presidents face a loss of majority in the parliament, they will call for early election to try to shore up or salvage the majority. To provide empirical evidence supporting this claim, prospect theory has been applied to the two presidential elections in Yugoslavia and Serbia in which two incumbent presidents, Slobodan Milošević (2000) and Boris Tadić (2012), had lost early presidential elections. The expected contribution of the paper is to deepen our understanding of how semi-presidential regimes resolve the problem of temporal rigidity and offer novel empirical data in support of the application of prospect theory in political science.