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...