Introducing Prospect Theory into Defense Acquisition Strategy: Framing Early Decisions for Joint Warfighting Advantage

Abstract

In an age of renewed great-power competition, accelerating acquisition processes is a necessity. Achieving speed, however, depends on refining the early framing and conceptual phases of programs to deliver value to the warfighter and enable Joint Warfighting Concepts. This study introduces prospect theory, developed by Kahneman and Tversky, as a decision tool for understanding how pressures related to time, cost, schedule, and risk can distort choice sets in major defense acquisition programs (MDAPs). These pressures can introduce biases that override objective analysis and logical acquisition pathways. Through an analysis of acquisition behavior and program documentation related to the Littoral Combat Ship (LCS) and the Integrated Combat System (ICS), this study shows how misaligned framing can lead to prolonged corrective actions, while alignment with acquisition best practices and Joint Force requirements can improve program outcomes. The study further proposes artificial intelligence (AI) as an auditing tool to identify early bias and improve alignment among acquisition pathways, force-structure development, and Joint Force capability needs.