The future instability of cross-strait relations: prospect theory and Ma Ying-Jeou's paradoxical legacy

The 2016 Taiwanese elections which saw a sweeping victory of Tsai Ing-wen and the DPP have revived the question of cross-Strait instability. While observers have generally focus on whether or not the Tsai administration could cross Beijing’s red lines, few have taken into consideration the dynamic nature of these red lines, and how Ma’s presidency had impacted them. This article fills this gap by drawing on prospect theory hypotheses to assess the shift of Beijing’s preferences in the Taiwan Strait. It explains that Ma’s accommodative policy have left a paradoxical legacy as China is likely to be today more risk-acceptant on a comparatively wider range of cross-Strait outcomes, making cross-Strait relations more crisis-prone than they have ever been.