Lieutenant Colonel James V. Schultz, USA
This is a study of the applicability of prospect theory to military decision making.Prospect theory posits that the decision maker’s reference point determines thedomain in which he makes a decision. One implication of this study is that if the decision maker can do the same for asubordinate or for an enemy, he may be better able to predict their responses in agiven situation. The project’s goal is to develop a framework for assessing riskpropensity. It does this by first describing the military decision-making process andconcluding that it is a rational decision-making process. Second, this study describesprospect theory and matches the key aspects of the theory with the militarydecision-making process. Third, it proposes a framework for assessing riskpropensity. The theory is tested in a case study of Gen Dwight D. Eisenhower’s 1944decision to launch Operation Market Garden. This decision is analyzed in terms ofGraham T. Allison’s three models for decision making and prospect theory todetermine which model or theory seems to provide the best explanations for Eisenhower’s decision.
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