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Prospect theory qualitative analysis
Cuban Missile Crisis
Example of a qualitative Prospect Theory Analysis taken from:
Example Cuban missile crisis
Actor
Actor situation(Frame)
Description
Iniciative
Beneficios potenciales
Description Benefits
Potential costs
Description Costs
Result position in relation to the Reference Point
Image
Prob of success
Asignacion de peso a la probabilidad de exito
Grafico
Rechazo al Riesgo
Motivated to increase gains
Propensity to risk
Possible Decision
Kruschev
it's in a loss situation
Internal and international problems
Send missiles to Cuba
Beneficios Altos
Restablecer balance de poder, Mejora situacion del lider interna
Costos Muy altos
Possible war with US
Below Reference Point
Low Prob. Success
Increase weight
Risk Aversion Increases
Very High Risk Propensity
Take the risk to send missiles
Kruschev
it's in a loss situation
Play has strong opponents with power
Return missiles to USSR
Beneficios Altos
Evita guerra con US
Costos Muy altos
international humiliation
Above Reference Point (Gain)
High Prob. Success
Decreases weight
Risk Aversion Increases
Propensity for conservatism (Certainty)
Returns missile to URRS
Kennedy
it's in a loss situation
Problemas internos Imagen de novato por Bahia de Cochinop
Decides to block Russian ships
Very High Benefits
Pone en alto posicion de USA
Very High Costs
Possible war with USSR
Far Above Reference Point (Gain)
Medium Prob. Success
Decreases weight
Risk Aversion Decreases
Very High Risk Propensity
Block Russian ships
Kennedy
It's in a gain situation
Jugada de bloqueo rescata imagen de lider
Increased pressure and threatening speech
High Benefits
Sigue en aumento credibilidad
Very High Costs
Increase chance of war with USSR
Above Reference Point (Gain)
Very High Prob. Success
Decreases weight
Risk Aversion Decreases
Moderate Risk Propensity
Increases pressure
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