Prospect Theory And Foreign Policy Analysis In The Asia Pacific

By examining major events in Asian security, this book investigates why and how leaders make risky and seemingly irrational decisions in international politics. The authors take the innovative step of integrating the neoclassical realist framework in political science and prospect theory in psychology. Their analysis suggests that political leaders are more likely to take risky actions when their vital interests and political legitimacy are seriously threatened. This pioneering book tests and expands prospect theory to the study of Asian security and challenges traditional, expected-utility-based, rationalist theories of foreign policy behavior.

Why does North Korea behave erratically in pursuing its nuclear weapons program? Why did the United States prefer bilateral alliances to multilateral ones in Asia after World War II? Why did China become "nice"—no more military coercion—in dealing with the pro-independence Taiwan President Chen Shuibian after 2000? Why did China compromise in the negotiation of the Chunxiao gas exploration in 2008 while Japan became provocative later in the Sino-Japanese disputes in the East China Sea? North Korea’s nuclear behavior, U.S. alliance strategy, China’s Taiwan policy, and Sino-Japanese territorial disputes are all important examples of seemingly irrational foreign policy decisions that have determined regional stability and Asian security. By examining major events in Asian security, this book investigates why and how leaders make risky and seemingly irrational decisions in international politics. The authors take the innovative step of integrating the neoclassical realist framework in political science and prospect theory in psychology. Their analysis suggests that political leaders are more likely to take risky actions when their vital interests and political legitimacy are seriously threatened. For each case, the authors first discuss the weaknesses of some of the prevailing arguments, mainly from rationalist and constructivist theorizing, and then offer an alternative explanation based on their political legitimacy-prospect theory model. This pioneering book tests and expands prospect theory to the study of Asian security and challenges traditional, expected-utility-based, rationalist theories of foreign policy behavior.

This study brings together Asian and Asia-based experts of international relations and U.S. foreign policy to present diverse Asian views about preferred modes of U.S. engagement in the region and compare their views with U.S. interests in the region-a prerequisite exercise to truly multilateral regional security governance. With the rise of Chinese power in absolute and relative terms over the next decades as a key driving factor of the international relations in the Asia Pacific, the United States has announced its "Rebalance to Asia" (previously referred as "Pivot to Asia") strategy. Asian responses, perceptions, and even interpretations of the U.S. strategy have been diverse. Misconceptions of the U.S. strategy can be attributed to the built-in contradictions among its objectives, deliberate ambiguities left by the architects of the strategy, mismatch between the stated strategy and actual policy implementations during the last three years, and subjective reading by the Asian countries through the lens of their own interests. This book will illuminate the diversity of Asian responses and perceptions and analyze the underlying reasons of the diversity. The overarching framework of analysis for this book is the very dilemma of alliances-abandonment and entrapment-which "hedging" aims at evading. "Abandonment" fear is primarily of the junior partner of an alliance that its senior partner may not come to its aid in crisis. Meanwhile, "entrapment" fear works both ways. The United States may drag its allies into its conflict against a third party, but U.S. allies may also drag the United States into their regional conflicts in which the United States has no direct or significant stake. The Asian choices of their strategic responses to the U.S. Rebalancing will be described and analyzed through the lens of the perceived balance between the abandonment and entrapment fears as well as other historical and domestic factors unique to each Asian country. The reading of the U.S. strategy by Asian countries is a subjective matter, and their interests likely influence their analysis and consequently strategies. It is not the aim of this volume to establish well defined "cause-and-effect" chain between the U.S. strategy and Asian strategies, but thick descriptions have enabled some chapter authors to identify reciprocal relations between the two. While China's growth is the most important driver of the changing strategic landscape in the Asia Pacific and the new U.S. strategy, the new U.S. strategy inevitably influence the Chinese strategy, which in turn triggers a chain reaction of strategic revisions in Asian countries. This book is essential reading for scholars in Asian politics, U.S. foreign policy, international relations as well as for policy makers.

The observation of a rising Asia and its rapidly growing economic powerhouses has become a truism. These impressive economic development stories provide the backbone for the growing political assertiveness in the region. Asia's economic prowess is rapidly being transferred onto the diplomatic stage. In the light of these larger developments, the authors of this timely volume investigate the regional and international implications of a rising Asia and problematise critical developments. The first section focuses on the lack of a proper regional security community in Asia. The second part analyses the usefulness of 'Asia' as a catch-all for very distinct sub-regions. While not denying the utility of the concept of Asia as one region, the authors support the need to maintain in parallel a clear focus on issues, approaches, and characteristics that are unique to sub-regions within the continent. A third group of authors probe the regional foreign policies of key players in the region, exploring the security strategies and diplomacies of major regional actors.

What tools will international relations theorists need to understand the complex relationship among China, Japan, and the United States as the three powers shape the economic and political future of this crucial region? Some of the best and most innovative scholars in international relations and Asian area studies gather here with the working premise that stability in the broader Asia-Pacific region is in large part a function of the behavior of, and relationships among, these three major powers.

Since the end of the Cold War, China has experienced several notable interstate crises: the 1999 'embassy bombing' incident, the 2001 EP-3 mid-air collision with a United States aircraft, and the Diaoyu/Senkaku dispute with Japan. China's response to each incident, however, has varied considerably. Drawing from a wealth of primary sources and interviews, this book offers a systematic analysis of China's crisis behavior in order to identify the factors which determine when Chinese leaders decide to escalate or scale down their response to crises. Inspired by prospect theory - a Nobel Prize-winning behavioral psychology theory - Kai He proposes a 'political survival prospect' model as a means to understand the disparities in China's behavior. He argues that China's response depends on a combination of three factors that shape leaders' views on the prospects for their 'political survival status', including the severity of the crisis, leaders' domestic authority, and international pressure.

This volume offers a comprehensive and empirically rich analysis of regional maritime disputes in the South China Sea (SCS). By discussing important aspects of the rise of China’s maritime power, such as territorial disputes, altered perceptions of geo-politics and challenges to the US-led regional order, the authors demonstrate that a regional power shift is taking place in Asia-Pacific. The volume also provides in-depth discussions of the responses to Chinese actions by SCS claimants as well as by important non-claimant actors.

The disintegration and questioning of global governance structures and a re-orientation toward national politics combined with the spread of technological innovations such as big data, social media, and phenomena like fake news, populism, or questions of global health policies make it necessary for the introduction of new methods of inquiry and the adaptation of established methods in Foreign Policy Analysis (FPA). This accessible handbook offers concise chapters from expert international contributors covering a diverse range of new and established FPA methods. Embracing methodological pluralism and a belief in the value of an open discussion about methods’ assumptions and diverging positions, it provides new, state-of-the-art research approaches, as well as introductions to a range of established methods. Each chapter follows the same approach, introducing the method and its development, discussing strengths, requirements, limitations, and potential pitfalls while illustrating the method’s application using examples from empirical research. Embracing methodological pluralism and problem-oriented research that engages with real-world questions, the authors examine quantitative and qualitative traditions, rationalist and interpretivist perspectives, as well as different substantive backgrounds. The book will be of interest to a wide range of scholars and students in global politics, foreign policy, and methods-related classes across the social sciences.

How does China see the rest of the world? One way to answer this question is to look at the work of China’s scholars in the field of International Relations (IR). This leads to a second question – to what extent do Chinese IR scholars influence Beijing’s foreign policy and outlook? The contributors to this book seek to answer these key questions, drawing on their own first- and second-hand experiences of involvement in scholarly IR debates in China. Discussing fundamental aspects of China’s foreign policy such as China’s view of the international structure, soft power projection, maritime disputes, and the principle of non-interference, this book provides insights into the hinterland of Chinese foreign policy-making. It is an invaluable reference for global IR scholars, especially those with a direct interest in understanding and predicting China’s actions and reactions on a range of international issues.

This handbook in two parts covers key topics of the theory of financial decision making. Some of the papers discuss real applications or case studies as well. There are a number of new papers that have never been published before especially in Part II.Part I is concerned with Decision Making Under Uncertainty. This includes subsections on Arbitrage, Utility Theory, Risk Aversion and Static Portfolio Theory, and Stochastic Dominance. Part II is concerned with Dynamic Modeling that is the transition for static decision making to multiperiod decision making. The analysis starts with Risk Measures and then discusses Dynamic Portfolio Theory, Tactical Asset Allocation and Asset-Liability Management Using Utility and Goal Based Consumption-Investment Decision Models.A comprehensive set of problems both computational and review and mind expanding with many unsolved problems are in an accompanying problems book. The handbook plus the book of problems form a very strong set of materials for PhD and Masters courses both as the main or as supplementary text in finance theory, financial decision making and portfolio theory. For researchers, it is a valuable resource being an up to date treatment of topics in the classic books on these topics by Johnathan Ingersoll in 1988, and William Ziemba and Raymond Vickson in 1975 (updated 2 nd edition published in 2006).