Loss Aversion and Foreign Policy Resolve

This article draws upon recent findings from the field of neuroscience to explore how loss aversion affects foreign policy resolve. We theorize that U.S. policy makers are more resolute in pursuing preventive policies that seek to avoid losses than they are in pursuing promotive policies that seek to acquire new gains. To test our theory, we conduct the first large‐n analysis of foreign policy hypotheses derived from the neuroscience of loss aversion using data from 100 cases of U.S.‐initiated Section 301 trade disputes. The results provide strong support for the loss‐aversion‐based theory, revealing that American policy makers are willing to fight harder and hold out longer in trade disputes with preventive objectives than they are in cases with promotive ones. Our study demonstrates that hypotheses derived from neuroscientific findings can be tested using large‐n techniques in study of foreign policy, revealing a new avenue of inquiry within the field.