THE ORIGINS AND FUNCTION OF THE REFERENCE POINT IN RISKY GROUP DECISION-MAKING THE CASE OF THE CUBAN MISSILE CRISIS

This case study explores reference level effects on group decision making during the Cuban missile crisis of 1962. The group is composed of American President John F. Kennedy and his advisers. The results are consistent with much experimental evidence showing that reference levels play an important role in determining preferences. The results also extend the notion of reference-dependent risky choice to the group level, where the group consists of seasoned experts who each have a different role to play within the group and who are dealing with an issue of great importance.