Australia’s Engagement in the South China Sea under the Prospect Theory Approach and Implications for Australia-Vietnam Relations

Sang Tam Huynh


Prospect theory, first described in a 1979 paper by Daniel Kahneman and Amos Tversky, proves to be an effective tool to explain how people evaluate risk and make decisions in experimental settings. Due to remarkable insights for social sciences, prospect theory has gone beyond economics and provided insights for international relations. This paper aims at using prospect theory to illuminate the nature of Australia’s engagement in the South China Sea (SCS) and thereby clarify the essence of Australia-Vietnam cooperation. In terms of prospect theory approach, the author argues that there are three factors specifying Australia’s involvement in the SCS, including: (i) the rise of China in the SCS, (ii) Australia’s significant interests in the SCS, and (iii) Australia's proactive middle-power status. In light of certain common interests in the SCS, Australia and Vietnam have been sharing serious concerns about security and the risk of conflict in the SCS. From the year 2009 until now, both countries have actively enhanced diplomatic, political and military ties. Regarding Australia’s status and strategic interests in the SCS, the author asserts that Australia should make the SCS more secure by promoting contributions to accommodate its status in the Asia-Pacific region. The findings of this paper would provide helpful guidance for policymakers and leaders from Australia and Vietnam for a better understanding of the increasingly complicated security environment and how to (re-) create a more stable environment in this region.

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Asian Culture and History   ISSN 1916-9655(Print)   ISSN 1916-9663 (Online)   Email:

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