Journals Proceedings

International Journal of Environmental Engineering

Fourfold Pattern of Undertaking Risky Environmental Projects

Author(s) : MIKE FUNG


Majority of past studies on managerial risk-taking have examined the determinants of risk-taking from the agency perspective. However, a substantial body of evidence has shown that Expected Utility Theory (EUT) provides inadequate description for decision-making under risky prospects. This study proposes an empirical framework for investigating managerial incentives to undertake risky environmental projects. Such incentives are assumed to follow the fourfold pattern of risk-attitude as implied by Cumulative Prospect Theory (CPT) – risk-taking is higher over low-probability reference gains or high-probability reference losses, and is lower over high-probability reference gains or low-probability reference losses. Reference gains and losses are respectively defined as positive and negative deviations from peers’ performance

No fo Author(s) : 1
Page(s) : 79
Electronic ISSN : 2374 - 1724
Volume 3 : Issue 1
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