Innovation and Entrepreneurship: The Role of Prospect Theory in Decision-Making

Jose Chavaglia and Jose Antonio Filipe

A chapter in Innovation - Research and Development for Human, Economic and Institutional Growth from IntechOpen

Abstract: This chapter discusses prospect theory, which describes how people evaluate choices in terms of potential gains and losses and tend to be loss-averse. When it comes to innovation, the theory suggests that people are risk-averse, but may be more likely to take risks if they perceive potential losses instead of gains. The theory can also help understand how entrepreneurs make decisions. This chapter also mentions advances in behavior genetics and epigenetics that may influence innovation-promoting behaviors, but culture and how ideas spread are also important. To move innovation forward, it is important to carefully analyze risks, benefits, costs, and potential impacts and involve all relevant stakeholders in the process of innovation development and implementation.

Keywords: prospect theory; innovation; risk aversion; entrepreneurship; behavior genetics; epigenetics; cognitive biases; decision-making (search for similar items in EconPapers)
JEL-codes: O32 (search for similar items in EconPapers)
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.intechopen.com/chapters/86997 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ito:pchaps:312958

DOI: 10.5772/intechopen.111396

Access Statistics for this chapter

More chapters in Chapters from IntechOpen
Bibliographic data for series maintained by Slobodan Momcilovic ().