THE ROLE AND PLACE OF PROSPECT THEORY IN INNOVATIVE MANAGEMENT
Journal: International scientific journal "Internauka." Series: "Economic Sciences" (Vol.1, No. 58)Publication Date: 2022-02-28
Authors : Rodionov Pavlo; Gorbacheva Oksana; Rodionova Olena;
Page : 81-86
Keywords : information; knowledge; innovations; innovation management; theory of perspectives;
Abstract
The paper considers the possibility of applying the theory of perspectives for the analysis of innovation, in particular the question of decision-making on investing in innovative projects. An important feature of innovation management is the dilemma of the innovator, which consists of two main parts. The first part is the value of innovation, which can be represented as an S-curve, which in turn shows that it takes time and many iterations to improve a product. The second part includes agreements of the current size, ie a situation where the existing company has a significant number of customers, but also high expectations for annual sales. The main catalyst for changes in consumer values in the market are subversive innovations, which are created mainly by «newcomers» to the market or small businesses with little capital. In view of the above, it is proposed to use the theory of perspectives to better understand innovation, in particular the nature of the processes involved in making decisions about investing in an innovation project. According to the prospect theory, the evaluation of performance is not in accordance with the methodology and methods of utility theory, but as a set of gains and losses. In this case, the subjective value of losses will be higher than the value of gains, i. e. agents overestimate the probability of unlikely events and vice versa. An important conclusion from perspective theory is that economic agents' decision-making is subjective and based on their own perception of the value or utility they expect to receive. Thus, the paper shows the possibility of using the theory of perspectives to better understand innovation. As prospects for further research, it is proposed to conduct empirical research on decision-making processes in the field of innovation.
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