An Analysis of Effectiveness of Economic Sanctions and Inducements and Implications for Policies towards North Korea Based on Theoretical Applications from Prospect Theory

Abstract

Economic sanctions and inducements are types of ‘policy instruments’ based on ‘economic tools’ to influence other international actors. Ongoing debates on sanctions and inducements have exposed drawbacks for relying on individual case studies. There are some studies in the literature that attempt theoretical analysis of sanctions and inducements, but they are mostly based on rational choice theory. In reality, however, there exist so many cases that cannot be explained by rational choice theory. These are called anomalies or exceptions. The literature introduces specific variables to interpret these anomalies and thus sacrifice the universality of the theory.

Keywords

• 전망이론(Prospect Theory)
• 경제제재(Economic Sanctions)
• 경제지원(Economic Inducements)