The String of Pearls is a term that has permeated Indian naval policy circles in recent years. This term encapsulates the idea that, since the early 1990s, China has been developing a network of naval bases in south Asian littoral nations as a means to project maritime power into the Indian Ocean and beyond to the Middle East. Contrary to Indian perceptions, Chinese activity in the littoral nations has, to this point, been primarily economic, not military in nature. Nonetheless, this activity has prompted a change in Indian naval doctrine to support the employment of a blue water navy. This change in Indian naval doctrine can be explained utilizing Prospect Theory. Prospect Theory describes the effects of a psychophysical tendency that prompts people to become risk acceptant in the face of losses. This study will show how the Indian National Security Elite, when faced with the perceived loss of power and influence to China in south Asian waters, endorsed blue water naval doctrine as a means to reestablish the status quo of relative naval superiority in the northern Indian Ocean.