When the claim hits: bilateral investment treaties and bounded rational learning
Using the international investment regime as its point of departure, the paper applies notions of bounded rationality to the study of economic diplomacy. Through a multi-method approach, it shows that developing countries often ignored the risks of bilateral investment treaties (BITs) until they themselves became subject to an investment treaty claim. Thus the behavior of developing country governments with regard to the international investment regime is consistent with that consistently observed for individuals in experiments and field studies: they tend to ignore high-impact, low-probability risks if they cannot bring specific ‘vivid’ instances to mind.
|Date of creation:||Apr 2013|
|Date of revision:|
|Publication status:||Published in World Politics, April, 2013, 65(2), pp. 273-313. ISSN: 0043-8871|
|Contact details of provider:|| Postal: |
Phone: +44 (020) 7405 7686
Web page: http://www.lse.ac.uk/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bubb, Ryan J. & Rose-Ackerman, Susan, 2007. "BITs and bargains: Strategic aspects of bilateral and multilateral regulation of foreign investment," International Review of Law and Economics, Elsevier, vol. 27(3), pages 291-311, September.
- Colin F. Camerer & Howard Kunreuther, 1989. "Decision processes for low probability events: Policy implications," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 8(4), pages 565-592.
- Aisbett, Emma, 2007.
"Bilateral investment treaties and foreign direct investment : correlation versus causation,"
CUDARE Working Paper Series
1032R, University of California at Berkeley, Department of Agricultural and Resource Economics and Policy.
- Aisbett, Emma, 2007. "Bilateral Investment Treaties and Foreign Direct Investment: Correlation versus Causation," MPRA Paper 2255, University Library of Munich, Germany.
- Aisbett, Emma, 2007. "Bilateral Investment Treaties and Foreign Direct Investment: Correlation versus Causation," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt72m4m1r0, Department of Agricultural & Resource Economics, UC Berkeley.
- John Conlisk, 1996. "Why Bounded Rationality?," Journal of Economic Literature, American Economic Association, vol. 34(2), pages 669-700, June.
- repec:ner:tilbur:urn:nbn:nl:ui:12-3125517 is not listed on IDEAS
- McClelland, Gary H & Schulze, William D & Coursey, Don L, 1993. " Insurance for Low-Probability Hazards: A Bimodal Response to Unlikely Events," Journal of Risk and Uncertainty, Springer, vol. 7(1), pages 95-116, August.
- Jerry A. Hausman & Bronwyn H. Hall & Zvi Griliches, 1984.
"Econometric Models for Count Data with an Application to the Patents-R&D Relationship,"
NBER Technical Working Papers
0017, National Bureau of Economic Research, Inc.
- Hausman, Jerry & Hall, Bronwyn H & Griliches, Zvi, 1984. "Econometric Models for Count Data with an Application to the Patents-R&D Relationship," Econometrica, Econometric Society, vol. 52(4), pages 909-38, July.
- Levy, Jack S., 1994. "Learning and foreign policy: sweeping a conceptual minefield," International Organization, Cambridge University Press, vol. 48(02), pages 279-312, March.
- van Harten, Gus, 2007. "Investment Treaty Arbitration and Public Law," OUP Catalogue, Oxford University Press, number 9780199217892, March.
- Jeffrey H. Bergstrand & Peter Egger, 2011.
"What Determines BITs?,"
CESifo Working Paper Series
3514, CESifo Group Munich.
- Simmons, Beth A. & Dobbin, Frank & Garrett, Geoffrey, 2006. "Introduction: The International Diffusion of Liberalism," International Organization, Cambridge University Press, vol. 60(04), pages 781-810, October.
- Mark Tuil & Louis Visscher, 2010. "Introduction," Chapters, in: New Trends in Financing Civil Litigation in Europe, chapter 1 Edward Elgar.
- Arellano, M. & Honore, B., 2000.
"Panel Data Models: Some Recent Developments,"
0016, Centro de Estudios Monetarios Y Financieros-.
- Busch, Marc L. & Reinhardt, Eric & Shaffer, Gregory, 2009. "Does legal capacity matter? A survey of WTO Members," World Trade Review, Cambridge University Press, vol. 8(04), pages 559-577, October.
- Srividya Jandhyala & Witold J. Henisz & Edward D. Mansfield, 2011. "Three Waves of BITs: The Global Diffusion of Foreign Investment Policy," Journal of Conflict Resolution, Peace Science Society (International), vol. 55(6), pages 1047-1073, December.
- David Lake, 2009. "Open economy politics: A critical review," The Review of International Organizations, Springer, vol. 4(3), pages 219-244, September.
When requesting a correction, please mention this item's handle: RePEc:ehl:lserod:45035. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (LSERO Manager)
If references are entirely missing, you can add them using this form.