Research Of Real Estate Investment Risk Decision Based On Utility Theory And Bayes Theory

With the fast development of china economy, real estate as a fundamental and dominant industry, gradually becomes the pillar industry of the national economy. By the end of 2002, real estate industry in our country always presents a good development state. But in nearly several years, some problems such as investment increasing in a overmuch speed, the idle rate of real-estate rising faster and the price climbing quickly are more and more coming forth, the risk in the real-estate come out with all these questions So, we must forecast the risk exactly and find a scientific method to reduce the risk during the decision-making of real estate investment.In this paper, by theoretical and positive methods, on the basis of domestic and abroad real-estate risk research, we try to find out all risks in the process of real-estate investment through investigating its present station and all the characteristics. At the same time, we also divided the risks into systematic and non-systematic and analyzed their source and influence on yield in detail based on the thought of risk division in Modern Portfolios Theory (MPT) and Capital Assets Pricing Model (CAPM). On the research of all the decision methods especially on model of risk, we find the cut-in point of the paper: By making use of the Effect Theory, Bayes Risk Decision-Making Theory and Multi-attribute Decision making Theory, a Bayes Risk Decision making Model of real-estate investment is established, which expects the minimum Bayes risk value and takes price of retail, cost of construction and cost of capital, the three major elements that influence the gain of real-estate investment, as the decision-making attributes. The last step is to test the model by listing practical examples, the result of which will demonstrate that it can enormously enhance the accuracy of the analysis to modify the previous decision-making by using new information.The main conclusions we get through this study is: Firstly, all kinds of risks in real estate investment accompany the investment process all the time and only the investors have the exact analysis and effective controlling risks, can they ensure the investment activities to achieve the anticipant results. The utility theory and Bayes decision making theory are combined to be used in real estate investment decision making area, which extends and enrich the methods of real estate investment and has...