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The Hybridisation of Conflict: A Prospect Theoretic Analysis

Author

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  • Pieter Balcaen

    (Department of Economics, Management and Leadership, Royal Military Academy, 1000 Brussels, Belgium)

  • Cind Du Bois

    (Department of Economics, Management and Leadership, Royal Military Academy, 1000 Brussels, Belgium)

  • Caroline Buts

    (Department of Applied Economics, Vrije Universiteit Brussel, 1000 Brussels, Belgium)

Abstract

Revisionist actors are increasingly operationalising a broad number of non-violent threats in their quest to change the status quo, popularly described as hybrid conflict. From a defensive point of view, this proliferation of threats compels nations to make difficult choices in terms of force posture and composition. We examine the choice process associated with this contemporary form of state competition by modelling the interactions between two actors, i.e., a defender and a challenger. As these choices are characterised by a high degree of uncertainty, we study the choice from the framework of prospect theory. This behavioural–economic perspective indicates that the defender will give a higher weight and a higher subjective value to conventional threats, inducing a higher vulnerability in the domain of hybrid deterrence. As future conflict will increasingly involve choice dilemmas, we must balance threats according to their probability of occurrence and their consequences. This article raises awareness regarding our cognitive biases when making these choices.

Suggested Citation

  • Pieter Balcaen & Cind Du Bois & Caroline Buts, 2021. "The Hybridisation of Conflict: A Prospect Theoretic Analysis," Games, MDPI, vol. 12(4), pages 1-15, October.
    • Handle: RePEc:gam:jgames:v:12:y:2021:i:4:p:81-:d:664585
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    References listed on IDEAS

    as
    1. Tversky, Amos & Kahneman, Daniel, 1992. "Advances in Prospect Theory: Cumulative Representation of Uncertainty," Journal of Risk and Uncertainty, Springer, vol. 5(4), pages 297-323, October.
    2. Amos Tversky & Daniel Kahneman, 1991. "Loss Aversion in Riskless Choice: A Reference-Dependent Model," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(4), pages 1039-1061.
    3. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    4. Stein, Janice Gross, 2017. "The Micro-Foundations of International Relations Theory: Psychology and Behavioral Economics," International Organization, Cambridge University Press, vol. 71(S1), pages 249-263, April.
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    Cited by:

    1. João Ricardo Faria & Daniel Arce, 2022. "A Preface for the Special Issue “Economics of Conflict and Terrorism”," Games, MDPI, vol. 13(2), pages 1-2, April.

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