Abstract
It has been extensively demonstrated that the trust between venture capitalists and entrepreneurs plays an important role in improving the success rate of entrepreneurship. However, little research has been performed concerning the dynamic nature of the trust between venture capitalists and entrepreneurs. Therefore, we attempt to reveal the motivations and process of trust between VCs and entrepreneurs from the perspective of dynamics. First, the theoretical model of dynamic trust was proposed. Second, reinforcement learning was introduced to design the multi-stage game model of dynamic trust, and the algorithm was illustrated. Reinforcement learning theory can reveal the reasons for dynamic changes in trust from a psychological perspective. Finally, the action strategies of venture capitalists and entrepreneurs were simulated. We observe that the dynamic characteristics of trust between venture capitalists and entrepreneurs are determined by entrepreneurs’ efforts. Venture capitalists can prevent investment risks and maintain trust stability when fewer funds are invested in the early stage and when more funds are invested in the later stage. Since the dynamic process of trust is also the process of learning about the other, the dynamic process of trust is non-linear, and the relationship is adaptive.
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.