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To see how prospect theory can be applied, consider the decision to buy insurance. Assume the probability of the insured risk is 1%, the potential loss is $1,000 and the premium is $15. If we apply prospect theory, we first need to set a reference point. This could be the current wealth or the worst case (losing $1,000).
Positive political theory (PPT), explanatory political theory, or formal theory is the study of politics using formal methods such as social choice theory, game theory, and statistical analysis. In particular, social choice theoretic methods are often used to describe and (axiomatically) analyze the performance of rules or institutions.
Theories of political behavior, as an aspect of political science, attempt to quantify and explain the influences that define a person's political views, ideology, and levels of political participation, especially in relation to the role of politicians and their impact on public opinion .
In 1979, Daniel Kahneman and Amos Tversky traced the cause of the disposition effect to the so-called "prospect theory". [3] The prospect theory proposes that when an individual is presented with two equal choices, one having possible gains and the other with possible losses, the individual is more likely to opt for the former choice even ...
The most dangerous trajectory in world politics is a long rise followed by the prospect of a sharp decline. They claim that several of Allison's cases in fact follow this pattern—and not that of the Thucydides Trap—including the Russo-Japanese War , World War I , and the Pacific War (they also point to America's imperial foray after the ...
Reference dependence is a central principle in prospect theory and behavioral economics generally. It holds that people evaluate outcomes and express preferences relative to an existing reference point, or status quo. It is related to loss aversion and the endowment effect. [1] [2]
In 1976, Macpherson was criticized from some on both the left and the right.In response, he claimed that what he had always been trying to do was to "work out a revision of liberal-democratic theory, a revision that clearly owed a great deal to [Karl] Marx, in the hope of making that theory more democratic while rescuing that valuable part of the liberal tradition which is submerged when ...
Hallin's spheres – Theory of media objectivity; Moral relativism – Philosophical positions about the differences in moral judgments across peoples and cultures; Normalization – Social processes through which ideas and actions come to be seen as normal; Opinion corridor – Theory of legitimate public discourse