Premises For A Model Of Decision-Making On The Financing Of A Project
Source: Babes-Bolyai University
The classical theory of finance is based on the premises of rationality and maximizing profits that accompany economic decision-making. Complementarily, the modern theory of behavioral finance studies the effect of emotional and psychological factors of decision-maker on the choice of financing sources for economic activities. In opposition with the classical perspective, the contemporary theory of finance brings up to the stage various aspects of decision making, including elements of strategic behavior towards risk. All these contradictory elements are used as premises for modeling the decision making process of financing a project.