Studies On Ship Investment Risk Based On Utility Theory

Vessel is the very important transport tool by sea. Shipping enterprises can improve the abilities of operation, benefit, competition by ship investment. However, there are some characteristics in ship investment, such as high vessel value, long recover period , many uncertain factors, which lead ship investor to face many kinds of risk under complicated international shipping market situation. In common, it is very difficult to forecast these risks. So it is very necessary for ship investor to evaluate the risk of ship investment projects by reasonable and scientific risk analysis methods.To large extent, the decision-maker's attitude towards risk and preference to result of every alternatives can affect the decision result. So it seems to be more scientific to use utility theory to analyze the risk in ship investment project.Based on the above background, at first, thesis analyzes the characteristics and risk in ship investment. Secondly, it presents two kinds of utility function about risk-averse decision-makers. Combining with Bayes method, author set up ship investment risk evaluation model. Considering the behavior of decision-makers and stochastic of effect factors, author wants to analyze the risk during ship operation more effectively. The decision rule is minimum of Bayes risk.The purpose of the thesis is to offer a new solution against ship investment risk problem, which can be as reference for decision-makers and appraisers who are engaging in such risk field.