Thucydides as Prospect Theorist

Abstract

Opposing the tendency to read Thucydides as a strong realist, committed to a theory of behavior that assumes rationality as expected utility maximization, Ned Lebow and Clifford Orwin (among others) emphasize Thucydides’ attentiveness to deviations from rationality by individuals and states. This paper argues that Thucydides grasped the principles underlying contemporary prospect theory, which explains why people over-weight potential losses. Thucydides offers salient examples of excessive risk-aversion and excessive risk-seeking by decision-makers variously faced with high or low probabilities of losses or gains. Thucydides shows that leaders’ rhetoric can limit or exacerbate the political effects of bias in risk assessment.