AN INNOVATIVE PERSPECTIVE ON FINANCIAL DECISION-MAKING

Abstract

This paper presents a multidisciplinary research that brings together areas such as finance, behavioral economics, fractal theory and management. Each of them presents a specific methodology for quantifying and measuring the analyzed phenomena. The present paper uses the multidisciplinary approach to the results of applying specific methods in areas such as psychology or exact sciences in the field of managerial finance, areas that apparently have nothing to do with each other. The results obtained from this approach highlight new knowledge, approached from a different perspective. The development of managerial finance science, a field of high interest at the moment at the level of companies, is at the heart of its financial decision-making. The paper analyzes the financing decision of enterprises both from the perspective of listed companies on the capital market as well as of the non-listed companies, and the scientific relevance of this research lies in the various conceptual clarifications presented. The degree of novelty brought by this research is supported by the innovative approach of the financing decision by addressing some elements of fractal theory, behavioral finance and managerial finances. At the same time, the paper highlights the theoretical and practical aspects of innovations in financial decision making. The impact of research results lies in the ability of the models approached to be used by any manager of a company in taking a financing decision in the context of efficient and innovative quantification of risks and performance. The risk associated with a particular form of financing is analyzed and quantified according to the specificity of the selected form of financing. This paper analyzes the defining characteristics of the risks associated with the financing decision taken by the managers of projects inside companies, taking into account the objective characteristics but also the subjective ones. This paper analyzes the innovative elements brought by the modern theories like behavioral finance, game theory, mechanism design-theory, managerial finance and others that have an impact on the financial decision process both at the enterprise level and from the perspective of the decision-making subject.

Keywords

• behavioral finance; expected value; fractals; project financing; decision model