University of Twente Student Theses
Loss aversion, risk acceptance, and powerful leaders' deviations from rationality. A prospect-theoretical application to the American escalation of the Vietnam War.
Hennings, Pauline Sophie (2020) Loss aversion, risk acceptance, and powerful leaders' deviations from rationality. A prospect-theoretical application to the American escalation of the Vietnam War.
|
PDF
1MB |
| Abstract: | Civil wars, a global pandemic, climate change, riots and terrorist attacks: the list of current crises is long, and it keeps on getting longer. It is, therefore, vitally important to understand powerful, yet oftentimes irrational leaders’ decision-making in crisis situations under risk and uncertainty. With this thesis, I aim at doing just that. More precisely, I apply Kahneman and Tversky’s Prospect Theory, which is the most influential descriptive theory of decision-making under risk, to the single-case study of former U.S. President Lyndon Johnson’s escalation of the Vietnam War in 1965. The applied research method is a qualitative content analysis of recently de-classified U.S. government documents and public speeches. I show successfully that Prospect Theory’s fundamental concepts of loss aversion and risk acceptance, provide a substantial explanatory value of leader’s irrational deviations from pursuing the highest expected utility, when making decisions in crisis situations. I conclude that the understanding of a past leader’s decision-making process, that this thesis offers, can help understand present leaders’ decision-making behavior in current crises, and may even aid to prevent future crises. |
| Item Type: | Essay (Bachelor) |
| Faculty: | BMS: Behavioural, Management and Social Sciences |
| Subject: | 06 documentary information, 15 history, 70 social sciences in general, 85 business administration, organizational science, 88 social and public administration, 89 political science |
| Programme: | Management Society and Technology BSc (56654) |
| Link to this item: | https://purl.utwente.nl/essays/82411 |
| Export this item as: | BibTeX EndNote HTML Citation Reference Manager |
Show download statistics for this publication
Show download statistics for this publicationRepository Staff Only: item control page