IMPACT OF BEHAVIORAL FINANCE ON ENTREPRENEURIAL DECISION MAKING

Author Name: ANUSHREE SRIVASTAVA

Volume: 01 &  Issue:

Country: India

DOI NO.: 08.2020-25662434, DOI Link: http://www.doi-ds.org/doilink/09.2020-47867318/

Affiliation:

1. ASSISTANT PROFESSOR, BABU BANARASI DAS UNIVERSITY, LUCKNOW, UP, INDIA

ABSTRACT

Decision making is one of the critical and most responsible areas of effective entrepreneurship. It is in entrepreneurship only where key decisions can have wide impact on the overall functioning of a business enterprise. There are three central decisions in entrepreneurship which are funding, investment, growth. Behavioral finance holds an important impact because it is the only theory applicable to issues in entrepreneurial finance and trends of investors towards investment and funding in these ventures. Although individual decision-making varies from person to person but in general, behavioral finance gives guidelines and expected tendencies of investment and the general mood of entrepreneurs. Risk taking behaviour is considered to be the key dimension of entrepreneurship as the theory of return is measured only with the amount of risk taken. But research provide mixed findings it’s not just entrepreneurs are risk raven from birth only, their judgements are affected by emotions, perceptions etc. to some extent. High risk propensity is due to fact that entrepreneurs perceive risky situations more optimistically than non-entrepreneurs

Key words: Finance, Decision making, Risk, Perception