Free Republic

Why do Washington and Moscow keep talking past each other? Prospect theory offers a plausible explanation. At its core, prospect theory argues that people are willing to take greater risks to avoid losses than they are to achieve gains. Instead of making decisions that maximize their overall expected utility, people focus on a particular reference point and give more weight to losses from that reference point than comparable gains. .... This explains why the United States and Russia keep talking past each other: U.S. leaders have ‘renormalized’ their reference point after the Maidan revolution, accepting the West-leaning interim Ukrainian government...

Brain scans can identify who is more "rational" and who is more "emotional," says a new study in the current issue of the journal Science. Researchers at University College London put subjects into a functional magnetic resonance imaging (fMRI) scanner and watched their brain activity as they sorted through some artfully structured choices. The researchers posed classic Tversky/Kahneman choices framed as gain and loss scenarios. In this case, the subjects were initially told that they would receive £50, but then were told that they had to choose between a "sure" option and "gamble" option. In so-called Gain frame, the...