Review of Risk Decision-Making Theory

Abstract

This paper describes the development course, present situation and future trend of risk decision theory. Since the middle of the 20th century, the theory of risk decision-making has become a hot topic in economics, psychology and management. With the advancement of globalization and technological innovation, decision makers are facing a more complicated risk environment. This paper discusses several key theoretical models in risk decision theory, including prospect theory, cumulative prospect theory and opportunity threat theory, and analyzes the influence of frame effect, individual differences, environmental factors and social and cultural factors on risk decision. At the same time, the paper also discusses the problem of risk decision-making in big data and dynamic environment, as well as the application expansion of comprehensive risk management and emerging risk decision-making. The future research direction of risk decision theory is prospected, and the importance of theoretical innovation, interdisciplinary integration and technical application is emphasized. This paper aims to provide a more comprehensive understanding of risk decision theory for current research and point out the direction for future research.