Prospect theory, game theory and international territorial disputes Prospect Theory, which is often associated with behavioral economics rather than game theory, shares some conceptual overlaps. Developed by Daniel Kahneman and Amos Tversky in 1979, Prospect Theory describes how people choose between probabilistic alternatives that involve risk, where the probabilities of outcomes are known. Some key … Continue reading Territorial Disputes in the Americas blog series. Post 20: Prospect theory, game theory and international territorial disputes