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 mak ing during the Cuban missile crisis of 1962. The group is composed of American President John F. Kennedy and his advisers. The results are c onsistent with much experimental evidence showing that reference level s play an important role in determining preferences. The results also extend the notion of reference-dependent risky choice to the group lev el, where the group consists of seasoned experts who each have a diffe rent role to play within the group and who are dealing with an issue o f great importance.