Research On Entrepreneurial Decision-Making Model Based On The Prospect Theory

Based on the latest international achievements in theoretical study, using the entrepreneural theory ,prospect theory, behavioral decision theory,Cognitive psychology as the guides,this paper analysis and interpret that how does entrepreneurs make decisions under the uncertain conditions .This dissertation build a entrepreneurial decision-making model based on the Prospect Theory, and through computer simulation, compare with the decision-making model which under complete information we got the conclusions.This paper is divided into six parts.Chapter one briefly explained the purpose of this paper, the significance and the methodologyof this paper, entrepreneurial decision-making and the content of Review.The chapter two describes some theories related to this dissertation. To begin with ,this chapter first set forth the Principal representative and the achievements of behaviorals, Profoundly expounded on the decision-making behavior of the school decision-making uncertainty of the main theoretical contributions. By comparison with the expected value theory and expected utility theory, analysis the drawbacks of the expected value theory and expected utility theory, Further argues the advantages of use of use the prospects theory to study the decision-making under uncertainties.Chapter three studied the factors of entrepreneurial decision-making. This chapter first discusses the risk perception, loss aversion, expected incomes,information and some related concepts ; Then elaborated on the various factors affecting the decision-making venture And the literature on the research results ;Finally, analyze some conclutions of the facotrs in prospect theory. Chapter four is the model of this dissertation. First, This chapter briefly analyze several factors of this model and put forward seven hypothesises.Following ,the model based on prospect theory was established,this model is a discrete-time continuous-state Markov decision process,the four factors studied in chapter three were set in this model as variables,this convenient for the simulation in chapter five. simultaneity , This chapter also has established a Optimal Decision model which has Complete information. The major role of this model is a as a reference model. Finally, the two models were analyzed and given the right mathematical proof.Chapter five is the simulation part. First,this chapter discribed the simulation process of the parameters , followed by, the simulation process were described as as a figure as vivid. Due to space limitations, this chapter only given the Pseudo code of the simulation program. According to the simulation data the horizontal and vertical contrast were given, through the Analysis of various factors in the decision-making model some conclusion were educed: The expected incomes has direct impact on entrepreneurial decision-making. Risk perception has direct impact on entrepreneurial decision-making. Loss Aversion and the entrepreneurial decision-making significant relationship. Access to information in the study of the impact of entrepreneurial decision-making process role , no significant changes were Found,under the circumstances with less information ,entrepreneurs have the inclination to make start-up decisions. In more complete information when making decisions and optimal decision vary greatly ,this may be has the relation with the smaller choice of Growth rate of information. It leads to entrepreneurs in the early refusal of opportunity.Chapter six is the conclusion of this dissertation. this chapter provided a summary of this paper summed up the main conclusion of the study and innovation, and finally made some prospects.