Volume 16 No 5 (2018)
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Brain Mechanism of Economic Management Risk Decision Based on Kahneman’s Prospect Theory
Tao Gan
Abstract
Risk decision-making under uncertain circumstances is a complicated process, which has always been the focus of
economic management research and attention. With the intersection of decision-making neurology and various
disciplines, it is possible to open the "black box" of human brain. Based on Kahneman's prospect theory, this
research takes the brain mechanism of economic management decision as the research goal and adopts literature
research method, neuroscience experiment method, data analysis and other research methods, to study behavior
data of "risk avoidance" and "risk seeking" decision-making and the related activation brain regions and brain
mechanisms under two different uncertain risk decision-making situations of "gain" and "loss." It is found that N2
and P3 components of frontal lobe, parietal lobe and central region are activated in both risk situations (gain and
loss), N2 component is related to the preliminary processing of risk decision-making, P3 component can reflect the
cognitive processing mechanism of managers' risk decision-making behavior, and the managers' decision-making
behavior and risk preference are obviously influenced by the situation factor
Keywords
Managers' Risk Decision-making, Prospect Theory, Risk Avoidance, Risk Seeking, Brain Mechanisms
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