Prospect Theory: Contributions to Understanding Actors, Causes and Consequences of Conflict in Africa

Wendy Trott

doi:10.5334/sta.cd

Abstract

Despite many recognized shortcomings, Rational Choice Theory remains the dominant perspective on decision-making in the literature on African conflict, whether overtly acknowledged or not. Prospect Theory, originally derived from the field of behavioural economics, can complement and advance this perspective not only by explaining the behaviour of actors, but also by allowing for predictions and the devising of strategies to avoid or end on-going conflicts based on a set of systematic biases that influence how actors make decisions. After a brief definition of Prospect Theory, this work will begin with an overview of the existing literature on decision-making as it relates to conflict, examine how Rational Choice is inadequate in explaining much human behaviour and thus how Prospect Theory can fill this gap. It will then move on to give a fuller definition of the various hypotheses derived from Prospect Theory that pertain to the study of conflict. An example of the application of Prospect Theory to a related field in which thorough research has been conducted, Deterrence Theory, will be used to demonstrate the model’s potential for study in other areas. This will be followed by a more in-depth analysis of the ways in which Prospect Theory can contribute to understanding the behaviour of actors in war, the causes of conflict, and the consequences in the African context. It will conclude with a summary and proposition for further research that can advance this analysis.

Highlights

Despite many recognized shortcomings, Rational Choice Theory remains the dominant perspective on decision-making in the literature on African conflict, whether overtly acknowledged or not
Prospect Theory is an advance on utility-maximizing Rational Choice in that while it accepts the importance of self-interest in motivating much human behaviour, it helps to explain areas where self-interest is not the driving force, or where it is manipulated to produce an irrational outcome (Monroe 2001)
While the accuracy of this theory remains under debate, and convincing empirical evidence has yet to surface in support of it, some analysts continue to perpetuate it and suggestions have been made that Uganda’s Yoweri Museveni was influenced by such incentives when he mobilized his troops in support of Rwanda to enter the both the first and second Congo Wars of 1996 and 1998.8 Applying Prospect Theory, international military action represents a risk leaders are more willing to take if they are facing a threat to their position, that is, they are in a loss frame (Levy 1992)

Summary

Introduction

Rational Choice Theory remains the dominant perspective on decision-making in the literature on African conflict, whether overtly acknowledged or not. Its utility supersedes that of an individualistic theory such as Waltz’s First Image (Waltz 1959), which inevitably has limited reach or explanatory power and has already been largely marginalized in the conflict discourse, discredited even by Waltz himself.2 In summary, Prospect Theory is an advance on utility-maximizing Rational Choice in that while it accepts the importance of self-interest in motivating much human behaviour, it helps to explain areas where self-interest is not the driving force, or where it is manipulated to produce an irrational outcome (Monroe 2001).

Results

Conclusion