Behavioral Economics in International Investment Law : Bounded Rationality in the Choice of Reservation List Modality

The RCEP (Regional Comprehensive Economic Partnership) is viewed as an alternative to the TPP (Trans-Pacific Partnership) agreement, which included the United States but excluded China. The RCEP was launched in November 2012, but failed to conclude in 2015, the original agreed-upon deadline. The investment chapter working group contributed to this delay. For the last four years, the member states have failed to agree on any of the terms in the investment agreement, instead debating over the modality of the reservation list of the main text. This reservation list is structured as either a positive or a negative list, however the two frameworks should yield the same legal consequences in principle. So why do member states have different preferences regarding the modality of the reservation list? This article employs behavioral economics to explain why member countries have different preferences regarding the framework