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A Cross-Cultural Exploration of the Reference Dependence of Crucial Group Decisions under Risk: Japan's 1941 Decision for War

Ariel S. Levi and Glen WhyteView all authors and affiliations

Volume 41, Issue 6

https://doi.org/10.1177/0022002797041006004

Abstract

This study investigates risky group decision making in Japan from a prospect theory perspective. Hypotheses concerning the effects of the reference point on risk preferences in group decision making were tested by content analyzing transcripts of Japanese leaders' deliberations prior to their 1941 decision for war and subsequent attack on Pearl Harbor. Consistent with prospect theory, the results show systematic associations between the reference point used and the riskiness of policy recommendations. The highly risky decision for war appears to have been influenced by the group's reference point, which framed the group's alternatives as a choice between losses. The decision for war thus appears to have been motivated by a desire to avoid what were otherwise perceived as certain losses.

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1. Although we confine our discussion here to the value function, it is important to note that prospect theory predicts that risk preferences will depend on the probability weighting function and the value function.

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