The Future Instability of Cross-Strait Relations: Prospect Theory and Ma Ying-Jeou’s Paradoxical Legacy

What Exactly is it that the Taiwan Greens Want? Extracting “Taiwan Subjectivity” from the Liberty Times Newspaper

“…"This typically means a staunchly defiant gesture toward Beijing by a second-term president, an effect more pronounced for the pro-independence camp" (Wu and Chen 2020, 172). Meanwhile, Yves-Heng Lim (2018) argues that the Beijing-accommodating KMT president Ma "left a paradoxical legacy as China is likely [as a consequence of Ma's policies] to be today more risk-acceptant on a comparatively wider range of cross-Strait outcomes, making cross-Strait relations [even] more crisis-prone than they have ever been (Lim, 2018, 318). Lim uses the logic of prospect theory to warn that Tsai's abandonment of Ma's appeasement policies could engender "the adoption of risk-seeking strategies by Beijing, as Ma, through his concessions, had shifted Beijing's domain of loss to the right" (making it more capacious)-and prospect theory holds that actors become more risk-acceptant when operating in the domain of loss (Lim 2018, 325).…”

“…1 Too much of the otherwise powerfully illuminating specialist literature ignores this fundamental question, evidently presuming that any de facto state operating under similar conditions as those faced by Taiwan would behave in an analogous fashion. We find such a rationalist assumption productive of useful but incomplete explanations (see, for example, Wu and Chen 2020;and Lim 2018). In the most extreme scenario, Taiwanese resistance to unification courts cataclysm, but even short of ultimate disaster, the economic costs that result from Taiwan not surrendering to Beijing's will are enormous, as are the costs associated with being isolated from much of the international community.…”