How Much is Enough? Psychological Aspects of "Guns Versus Butter" Decisions in a Simulated Security Dilemma

The present research investigated the role of cognitive processes in decisions regarding how much to spend on security, using a laboratory simulation of a security dilemma. Two experiments are described. The first experiment examined how perceived tradeoffs between security and wealth affect defense spending. As predicted, decision makers allocated less to security when the tradeoff between security and wealth was high. Experiment I also investigated how the act of imagining hypothetical scenarios influences individuals’ security decisions. As hypothesized, individuals spent more on defense when they had imagined “worst case” scenarios regarding their opponent than when they had imagined “best case” scenarios. A second experiment was conducted to examine the joint effects of decision framing and the perception of tradeoffs on security decisions. It was found that individuals spent the least on defense when the tradeoff between security and wealth was high and decisions were framed in terms of the economic losses associated with defense spending.