Abstract
Empirical findings of the behaviour of small firms in several countries and of large firms in two countries, indicate that risk taking by some businesses differs from that indicated by the Prospect Theory. Enterprises headed by entrepreneurs are more risk-taking/risk-neutral in the area of gains, and successful large corporations are more risk-averse overall because of the possibility of adverse factors, such as bankruptcy, than the Prospect Theory would imply. This leads to the proposal of a familiar tax incentive to spur investment. Another tax proposal is aimed at overcoming the disinclination of those who use heuristics to aid in decision making, to record those heuristics, the contexts in which they are made, and the biases involved (which contrasts with their care in recording more traditional and sometimes less influential data). The oversight limits their ability to improve the heuristics, which are often highly influential in the decisions they and other enterprises make.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.