Abstract
The selection of venture capital investment projects is one of the most important decision-making activities for venture capitalists. Due to the complexity of investment market and the limited cognition of people, most of the venture capital investment decision problems are highly uncertain and the venture capitalists are often bounded rational under uncertainty. To address such problems, this article presents an approach based on regret theory to probabilistic hesitant fuzzy multiple attribute decision-making. Firstly, when the information on the occurrence probabilities of all the elements in the probabilistic hesitant fuzzy element (P.H.F.E.) is unknown or partially known, two different mathematical programming models based on water-filling theory and the maximum entropy principle are provided to handle these complex situations. Secondly, to capture the psychological behaviours of venture capitalists, the regret theory is utilised to solve the problem of selection of venture capital investment projects. Finally, comparative analysis with the existing approaches is conducted to demonstrate the feasibility and applicability of the proposed method.
Highlights
Through decades of sustained development, China’s capital market is growing fast and has begun to take shape
With the aid of the maximum entropy principle and water-filling theory, we present two different mathematical programming models to determine the occurrence probabilities of the elements in the P.H.F.E., and an approach to probability hesitant fuzzy multiple attribute decision-making based on regret theory is proposed
Considering that the venture capitalist often takes the anticipated regret into account, the regret theory is applied to the decision-making process of venture capital investment
Summary
Based on fuzzy and rough set theory, Renigier-Biłozor, Janowski, and d’Amato (2019) proposed an automated valuation model for real estate market In these methods, the decision-making process tends to be uncertain and ambiguous as it involves complexity of human cognitive thinking (Liu et al, 2019a, 2019b; Zeng, Peng, Balezentis, & Streimikiene, 2019). Zhang et al (2018) have extended the T.O.D.I.M. method, which is based on prospect theory, to probabilistic hesitant fuzzy environment for the evaluation of venture capital projects. With the aid of the maximum entropy principle and water-filling theory, we present two different mathematical programming models to determine the occurrence probabilities of the elements in the P.H.F.E., and an approach to probability hesitant fuzzy multiple attribute decision-making based on regret theory is proposed.
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