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Putin’s Prospects: Vladimir Putin’s Decision-Making Through the Lens of Prospect Theory

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Putin’s Prospects: Vladimir Putin’s Decision-Making Through the Lens of Prospect Theory

Brian Lampert

“If you compress the spring all the way to its limit, it will snap back hard. You must always remember this.” – Vladimir Putin, March 18th, 2014[1]

Risky gambles or sure bets? Understanding how and why Vladimir Putin makes decisions regarding the use of Russian power abroad continues to challenge outside observers. Russia possesses the most significant capability and demonstrated intent to threaten US security and interests beyond any other state or non-state actor. Russia remains a major nuclear power with a large standing military and a permanent seat at the UN Security Council. After the US and NATO, Russia is the most aggressive actor leveraging force to shape—or reshape—the international order. Putin and the Russian elite have publically expressed their desire to reassert themselves as a regional hegemon and more significant player on the world stage. Despite all of this, no consensus has emerged regarding Putin’s decisions to exercise all elements of Russian power abroad over the past decade.

Far from an enigma, Putin is a rational self-interested actor bounded by time and information.[2] He ultimately makes decisions on behalf of the Russian Federation, though influenced and constrained by internal players. The data examined in this paper is publically available, and as such is often only what Putin and the Russian state want consumed by external audiences. While this limits insights, it is unlikely that he would publically declare positions radically different than his true beliefs and motivations. It is wise to accept his public statements, while acknowledging the incentives he has to over- or under-state his claims.

This article will only examine Putin’s decision making through the lens of prospect theory for both brevity and clarity. After a cursory look at what prospect theory has to do with an authoritarian leader like Putin, we will briefly examine three recent cases in an attempt to identify his reference point and framing. The article will conclude with generalized observations to better understand how the Russian leader may make future decisions.

What is Prospect Theory?

Before delving into prospect theory, a brief treatment of its predecessor is necessary. Prospect theory largely evolved from expected utility theory. Fortunately for most readers, the article will not focus on the mathematical proofs associated with either in favor of their fundamental concepts. At its most basic level, the idea of expected utility is that an actor weighs a series of choices according to the following formula:

Expected Utility = (Probability of Success*Utility of Success) -

(Probability of Failure*Utility of Failure)[3]

Based on these calculations, an actor is able to objectively measure and order his preferences for a variety of different courses of action.[4] However, the expected utility theory struggled with the fact that actor’s often choose poorly. One example of this flaw is that seemingly rational actors sometimes choose war rather than achieving a bargained solution. While one side will typically gain less in a bargain, it avoids the potentially disastrous prospects of war in which one side often gains much more at a greater cost to both sides.[5]

Prospect theory attempts to better determine how humans—rather than a purely rational “actor”—make decisions under risk. The basic premise is that reference points are subjective and relative to the actor. Kahneman and Tversky argue that “value is assigned to gains and losses rather than to final assets and probabilities are replaced by decision weights.”[6] At the core of prospect theory is the observed phenomenon that actors are more risk acceptant when they perceive themselves to be losing, and more risk adverse when they are winning. As depicted in Figure 1, the origin of the graph is the actor’s subjective reference point from which he evaluates gains and losses. The S-shaped curve of the function depicts the diminishing relationship between “objective gains and losses with subjective value.” When an actor is in the upper-right quadrant, he is in a gains frame and generally prefers less risky prospects; when an actor is in the lower-left quadrant, he is in a losses frame and generally prefers riskier gambles. Also demonstrated is that the losses portion of the function is steeper than the gains portion: given the same objective amount, a loss generally hurts more than a gain feels good. Providing a gambling analogy, it feels worse to lose $500 than to win the same amount.[7]

Figure 1 Subjective Utility Functions under Prospect Theory[8]

While there are a variety of findings that support prospect theory, understanding how this impacts a state’s view of its security and interests is critical for policy makers. First, it is difficult to deter a state if it is in a losses frame. A state in a losses frame views the status quo as unacceptable and will be more willing to take risks to improve their position.[9] Second, a state that believes they are declining in power or influence will likely be willing to accept risky prospects “to maintain the status quo against further deterioration or perhaps to recover recent losses.”[10] Third is the concept of variants on the status quo: a state may fix their reference point on a historical status quo, rather than the current status quo. This inevitably results in alternative framing, with the state trying to regain their position in a losses frame.[11] A state that has not accepted its losses and established a new reference point will be willing to make gambles that would be unacceptable had they shifted their reference point. States can and do, however, shift their reference point and preferences based on revisions to their framing and how they subjectively value outcomes.[12] All of these observations point to the importance to understanding how a state frames its current status and reference point for subjectively evaluating the value of choices and outcomes.

Putin in Brief

Vladimir Putin began public life as a mid-level KGB officer in East Germany and later in both St. Petersburg and Moscow. During this time, he worked in the First Directorate which was responsible for collecting foreign intelligence and conduct covert action. After the collapse of the Soviet Union, Putin became the director of the FSB until his appointment as the Russian Prime Minister in 1999 and shortly after President when Yeltsin stepped down. Since his ascendency to power, former Soviet intelligence and security personnel have largely taken control of most elements of Russian national power: government, military, media, and private industry.[13] Putin has shaped modern Russia into a managed democracy, centralizing power and authority with himself and his trusted elite.

Like all leaders, Putin is self-interested: he is concerned with his ability to remain in power and his legacy as a great Russian leader. Putin has carefully crafted a personal image of strength, masculinity, and traditional Russian values.[14] As observed by polling data, Putin receives a significant public opinion boost during conflicts with external opponents as many Russians rally around their leader.[15] As any issue is framed and its subjective value is analyzed, Putin’s own personal status must also be assessed regarding his perception of his reference point. This is particularly important, as Putin does not draw a significant distinction between himself and the state.

Case 1: Russian-Georgian War of 2008
On August 7th, 2008, Russian conventional and paramilitary forces invaded Georgia. In the course of five days of heavy fighting Russia wrested away two regions, Abkhazia and South Ossetia, from Georgia. It remains unclear who fired the first shots, but what is clear is that Russia conducted a significant military campaign utilizing all instruments of national power. Rather than discussing who started it, the better question to ask is why. Georgia was historically a part of the Russian empire, and was a Soviet Socialist republic from 1921 until 1991. After declaring independence from Russia, two important themes emerged. First, South Ossetia and then Abkhazia declared independence—with support from Russia—immediately after Georgia declared independence from Russia. These two regions saw themselves as ethnically and socially separate, and the Russian government supported their efforts. Second, Georgia began leaning towards the West. Georgia—as well as the Ukraine—was to be considered for admittance into NATO in December 2008, only four months after Russia invaded. The Russian invasion and subsequent sponsorship of an ongoing frozen conflict has effectively prevented Georgia from integration with NATO and provided Russia with significant leverage on their southern neighbor.

Based on public statements made both ante- and post-bellum, three key themes suggest Putin’s frame, reference point, and subjective values for deciding to invade Georgia.[16] First, Georgia and the two break-away regions are historically significant to the Russian Empire. Putin highlighted this significance shortly after the war, describing that Ossetia came into the Russian Empire in 1747, followed by Georgia and Abkhazia voluntarily joining in 1801. By making this distinction, Putin was arguing that Ossetia and Abkhazia were independent states that had chosen to join the Russian Empire, with Ossetia joining 50-years earlier than Georgia.[17]

Second, Putin was concerned that the recent election of pro-West Georgian President Saakashvili would lead to a loss of Russian influence on its southern neighbor.[18] Further, Putin saw continuing NATO encroachment on his borders. As a backdrop to this conflict, Putin was concerned with proposed US missile defense systems being positioned in Ukraine that would negate their ability to leverage their nuclear missile arsenal.[19] This represented both a security risk, but also a loss of prestige. As Putin stated shortly after the war in an interview with CNN, “As for Russia’s prestige, we don’t like what’s been happening...”[20] In many ways, Russia very likely viewed the war against Georgia as a preventive measure to stop Georgia from joining NATO.

Third, Putin saw Russia as protecting Russian citizens, former Russian subjects, and ethnic minorities from persecution from by the Georgian government. Initial statements made by Russian leaders at the beginning of the war highlighted the duty of the Russian Federation to protect both the lives and dignity of Russian citizens anywhere in the world.[21] Beyond legal Russian Federation citizens, Medvedev argued on 26 August 2008, that “our decisions were designed to prevent genocide, the extermination of peoples, and to help them get back on their feet again.”[22] Russia, often referencing Western action in Kosovo, framed the issue as a responsibility to protect by leveraging international language regarding genocide and mass atrocities.

Putin’s reference point is clearly a historical status quo in which all of Georgia, but especially Ossetia and Abkhazia, are a part of Russia. Whether it was from the Russian Empire of the 19th century or the Soviet Union of the 20th, it obviously was not the contemporary status quo of 2008 accepted by the West. As discussed earlier, a state in this position will typically be in a losses frame and be more willing to accept risky prospects in an attempt to reverse their position. Putin also observed the incremental expansion of NATO from the original 12 to the now 28 member countries as a deteriorating security position and a continual decline of the status quo.

Case 2: Russian Annexation of Crimea

Crimea is strategically located on the Black Sea, and controls access to the key Russian port of Rostov. It also was, and remains, the home of the Russian Black Sea Fleet and other Russian military installations. In late February of 2014—the exact date is questionable based on the irregular style of warfare waged by Russian and proxy forces—the Ukrainian territory of Crimea was invaded and subsequently annexed by Russia on 18 March, 2014. This invasion occurred weeks after a popular uprising led to a leadership change from Yanukovych to Turchynov, resulting in Ukrainian alignment shifting from east to west.

Crimea has significant historical significance to Russia, particularly the city of Sevastopol. Prince Vladimir—not Putin, but the other one from a thousand years ago who led the Kiev Rus Empire—was baptized into Orthodox Christianity here in 988.[23] Crimea was eventually annexed into the Russian Empire in 1783, and remained an integral part until Nikita Khrushchev gave the peninsula to the Ukrainian Soviet Socialist Republic in 1954.[24] Crimea was the site of much spilled Russian blood—particularly during the siege of Sevastopol during the Crimean War and World War Two—leading to the city being designated one of 12 Hero Cities. Given these historic Russian roots, it is unsurprising that 58% of Crimeans identify as ethically Russian[25] and Russian is the dominant language.

Putin provides a fairly detailed explanation of his framing and reference point during an 18 March 2014 speech announcing the annexation. First, Putin highlights the shared history and culture between Crimea and Russia. He does this by identifying Crimea as the location that brought “the overall basis of the culture, civilization and human values that unit the peoples of Russia” and of the scores of patriots who died defending this Russian territory with glory and valor. Putin calls Crimea “an inseparable part of Russia” and laments the 1954 decision to transfer Crimea to Ukraine as a “clear violation of the constitutional norms” and that Russia was “not simply robbed, it was plundered.”[26]

Next, Putin discusses his requirement to defend Russian-speaking Crimea from Ukrainian repression. He specifically brings up the Kosovo precedent regarding the rights of regions to declare independence and seek sovereignty.  He argues that Russia is obligated to defend the rights of Russians and Russian-speaking people using all instruments of national power.[27] It is clear that, to Putin, the people of Crimea were Russian due to not just ethnicity, but through shared language, culture, and history.

Finally, Putin directs his thoughts at the contemporary world order. He describes an ill-functioning structure dominated by the West, which was decreasing international stability and trust. He describes the continued eastward expansion of NATO and increased deployment of military forces along the Russian border as weakening their security position. Putin states “[The West is] constantly trying to sweep us into a corner because we have an independent position…But there is a limit to everything. And with Ukraine, our western partners have crossed the line…” He also highlighted his concerns about NATO membership for Ukraine, arguing that that it would be unacceptable to have NATO naval presence in Crimea because it would create a “real threat to the whole of southern Russia.”[28] In a later interview, Putin even states that he was prepared to alert his nuclear forces had the West responded militarily. [29]

Putin’s reference point for Crimea was as an integral part of Russia based on a historical understanding of shared ethnicity, language, history, and culture. To him, Crimea had always been Russian: the fact that it was technically part of Ukraine had not mattered until Russia lost political influence over Ukraine’s leaders. Prior to this, Putin believed the status quo to be acceptable because Russia was not concerned about a security threat emanating from Crimea and was able to exercise sufficient influence over the territory. When Yanukovych lost power in Ukraine, Putin’s observed the status quo quickly declining. This shift put Putin into a losses frame, and as the situation was rapidly declining he felt he had to act quickly. Had he not made this gamble, he could have witnessed NATO vessels and US missiles positioned adjacent to his shores and inhabiting sacred Russian soil.

Case 3: Russian Military Intervention in Syria

For a third case, it is helpful to look at the recent Russian military intervention in Syria to support the Assad regime in its fight against a variety of insurgent groups. The first two cases, Georgia and Crimea, highlight territories that Russia placed a high degree of importance due to geographic proximity, national security, history, and culture. Syria represents something different, and may help identify generalizable observations regarding Putin’s reference point and framing.

Unlike the centuries of connective tissue between Russia and Georgia or the Ukraine, the relationship between Russia and Syria is relatively weaker. During the Cold War, the USSR maintained a fruitful relationship with the Assad-led Syrian government, representing Russia’s strongest Arab ally. This relationship resulted in three key outcomes that are relevant today. First, over this forty-plus year relationship many Russians moved to Syria as a result of educational exchanges and marriages. By the time the Syrian civil war began, around 100,000 Russians resided there. Additionally, Russia and Syria have significant economic ties: since 2009, “Russian companies have invested $20 billion in Syria,” to include large arms sales. These companies stand to lose billions of dollars in contracts if the Assad regime is toppled—particularly if replaced with a Western leaning government. Finally, Syria occupies an important geostrategic position in the region and Russian access to the Mediterranean via the port of Tartus.[30] Beyond these historical ties, Russia shares similar concerns with the West regarding ISIS. Scores of Russians have traveled to Syria to fight on behalf of the caliphate, and Russia worries about the impact of their return to Russian soil.

Despite a relatively young relationship between the two nations, Russian messaging attempted to draw a stronger historical tie. Russian parliamentarian Semyon Bagdasarov claimed that “If there was no Syria, there would be no Russia,” and that Syria was sacred Russian land.[31] This claim, weak as it is, draws from similar language used when justifying Russian intervention in Crimea. Another consistent theme is the role of Russia protecting itself, and the world, from the spread of radical jihadists. As pushed through various media channels, Russia has protected the West for centuries from Mongols, Napoleon, Hitler, and now ISIS.[32] Putin argues that “We cannot allow these criminals who have already tasted blood to return back home and continue their evil doings.”[33]

The most consistent of Putin’s themes regarding Syria is aptly summarized by a statement made in January 2016: “I can tell you precisely what we do not want to happen: we do not want the Libyan or Iraqi scenario repeated in Syria.”[34] While one may assume that Putin is speaking about the destruction brought about by these two wars, he instead focuses on regime stability and the dangers of external interventions to promote regime change. He focuses on the fact that al-Assad was democratically elected, like himself, and that only the Syrian people should have the power to decide his fate. This theme illustrates one reason why Syria is so important to Putin: his concern over maintaining political control at home free from Western destabilization plots.

So what does Putin’s intervention on behalf of al-Assad in Syria tell us of Putin’s reference point and framing? In the light of Western interventions in Iraq and Syria, again Putin sees the West degrading the status quo. To paraphrase Berejikian, Putin is a revisionist unhappy with the new status quo—a failing al-Assad regime—who desires to return to an acceptable status quo that represents a continued economic partner and Arab ally.[35] This dissatisfaction with the new status quo puts Putin in a losses frame, and thus he is willing to make risky gambles to improve his position. The Syrian conflict also highlights another aspect of his framing: his concern regarding his domestic political power and legitimacy.


Given these three cases, it appears that Putin is subjectively evaluating prospects largely from a losses frame, based on a reference point tied to historical status quo as Russia as a great power. By continually referencing historical—real and revisionist—achievements, Putin harkens back towards a time of Russian greatness.  As prospect theory predicts, Putin desires to change the status quo to favor Russia’s position, and is willing to gamble the use of military force to do so. Rather than a grand strategist however, Putin is more like a gambler on a winning streak attempting to make up for previous losses.

A few consistent themes regularly appear to justify Putin’s gambles. The first is a tie based on shared language, ethnicity, culture and history. This tie usually has a basis in reality, though sometimes revisionist. While some would argue that Russian propagandists are simply trying to craft a narrative for their actions, this is valuable evidence regarding Putin’s perceived loss of status and influence over the regions and peoples he sees as Russian. Putin also views the expansion of Western institutions and power as a zero-sum game in which Russia is on the losing end. In this sense, not only is the status quo unacceptable but it must be altered. As he stated in 2007, “Russia is a country with a history that spans more than a thousand years and has practically always used privilege to carry out an independent foreign policy. We are not going to change that tradition today.”[36]

By understanding his reference point and framing, his future choices are illuminated. Moving towards a new status quo requires a return to Russian power and influence both regionally and internationally. Regionally, Russia desires to regain social and cultural dominance in order to exert control over its near-abroad. When it is unable to do so, Putin is willing to execute risky prospects—to include the use of military force—to gain control. Putin also desires to regain influence and power internationally. Doing so ensures not only benefits Russian economic and political interests, but also ensures Russia has the ability to ensure regime survival domestically. By weakening Western political and economic institutions, Putin is able to fill voids with institutions controlled by Russia. Ultimately, Russian power and influence abroad ensures regime stability at home.  

End Notes

[1] Vladimir Putin, “Transcript: Putin says Russia will protect the rights of Russians Abroad,” Washington Post, March 18, 2014,, (accessed February 12, 2016).

[2] Jeffery D. Berejikian, “A Cognitive Theory of Deterrence,” Journal of Peace Research, Vol. 39, No. 2, March 2002, 166.

[3] Bruce Bueno de Mesquita, “The War Trap Revisited: A Revised Expected Utility Model,” The American Political Science Review, Vol. 79, No. 1, March 1985, 156-177.

[4] James D. Marrow, “A Continuous-Outcome Expected Utility Theory of War,” Journal of Conflict Resolution, Vol. 29, No. 3, September 1985, 475.

[5] James D. Fearon, “Rationalist Explanations for War,” International Organization Foundation, Vol. 49, No. 3, 1995, 390.

[6] Daniel Kahneman and Amos Tversky, “Prospect Theory: An Analysis of Decision Under Risk,” Econometrica, Vol. 47, No. 2, March 1979, 263.

[7] Jeffery D. Berejikian, “A Cognitive Theory of Deterrence,” Journal of Peace Research, Vol. 39, No. 2, March 2002, 170-171.

[8] Ibid, 171.

[9] Ibid, 173.

[10] Jack S. Levy, “Loss Aversion, Framing, and Bargaining: The Implications of Prospect Theory for International Conflict,” International Political Science Review, Vol. 17, No. 2, April 1996, 189.

[11] Butler, Christopher K. “Prospect Theory and Coercive Bargaining,” Journal of Conflict Resolution, Vol. 51, Number 2, April 2007, 243.

[12] Daniel Kahneman and Amos Tversky, “Prospect Theory: An Analysis of Decision Under Risk,” Econometrica, Vol. 47, No. 2, March 1979, 286.

[13] Edward Lucas, The New Cold War, Palgrave Macmillian: New York, 2014, Chapter 1.

[14] Alan Taylor, “Vladimir Putin, Action Man,” The Atlantic, September 13, 2011, (accessed February, 2016).

[15] See polling data from Gallup in 2014 ( and the Pew Research Center in 2015 ( .

[16] Despite the fact that Dmitry Medvedev was President at the time, with Putin as the Prime Minister, Putin likely made the ultimate decision to invade Georgia

[17] Vladimir Putin, “Vladimir Putin Interviewed by CNN,” August 29, 2008,, (accessed February 12, 2016).

[18] Clifford J. Levy, “The Georgian and Putin: A Hate Story,” The New York Times, April 18, 2009,, (accessed February 12, 2016).

[19] Luke Harding, “Putin issues nuclear threat to Ukraine over plan to host US shield,” The Guardian, February 13, 2008,, (accessed February 12, 2016).

[20] Vladimir Putin, “Vladimir Putin Interviewed by CNN,” August 29, 2008,, (accessed February 12, 2016).

[21] Dmitry Medvedev, “Official Statement of President Medvedev upon Invading South Ossetia,” August 8, 2008,, (accessed February 12, 2016).

[22] Dmitry Medvedev, “Interview with Russia Today TV,” August 26, 2008,, (accessed February 12, 2016).

[23] N. Zernov, “Vladimir and the Origin of the Russian Church,” The Slavonic and East European Review, Vol. 28, No. 70, November 1949, 123-138.

[24] Adam Taylor, “To understand Crimea, take a look back at its complicated history,” The Washington Post, February 27, 2014,, (accessed February 12, 2016).

[25] “Crimea Profile- Overview,” BBC, March 13, 2015, (accessed 12 February, 2016).

[26] Vladimir Putin, “Transcript: Putin says Russia will protect the rights of Russians Abroad,” Washington Post, March 18, 2014, (accessed February 12, 2016).

[27] Ibid.

[28] Ibid.

[29] “Putin says Russia was ready for nuclear confrontation over Crimea,” Reuters, March 15, 2015,, (accessed February 12, 2016).

[30] Anna Borshchevskaya, “Russia’s Many Interests in Syria,” The Washington Instittute for Near East Policy, Policy Watch 2023, January 24, 2013,, (accessed February 12, 2016).

[31] Anna Borschchevskaya, “Russia’s Syria Propaganda,” Forbes World Affairs, November 11, 2015,, (accessed February 12, 2016).

[32] Simon Shuster, “Russian Propaganda Struggles To Find Good Reasons For Bombing Syria,” Time, October 5, 2015,, (accessed February 12, 2016).

[33] Vladimir Putin, “Address to U.N. General Assembly,” Washington Post, September 28, 2015,, (accessed February, 2016).

[34] Transcript, “Putin Interview Part 2,” Bild, January 12, 2016,, (accessed February 12, 2016).

[35] Jeffery D. Berejikian, “A Cognative Theory of Deterrence,” Journal of Peace Research, Vol. 39, No. 2, March 2002, 177.

[36] Vladimir Putin, “Prepared Remarks at 43rd Munich Conference on Security Policy,” Washington Post, 10 February 2007,, (accessed 12 February, 2016).


About the Author(s)

MAJ Brian Lampert is an active duty US Army Military Intelligence officer who has served in a variety of positions enabling special operations forces across four geographic combatant commands.