Advances in Management and Applied Economics

Product Innovation Risk Management based on Bayesian Decision Theory

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  • Abstract

    Innovation is an inexhaustible force for the prosperity of one nation, and also the life source of enterprises. Product innovation is an important aspect of innovation. However, the product innovation activities has high-risk characteristics. Enterprises have to perform scientific and effective product innovation risk management. Based on a general introduction of Bayestian Decision Theory principle, the author studied the practices of product innovation in enterprises. The paper discussed how to use Bayesian Decision Theory to achieve quantitative innovation-risk management in product innovation: based on the description of three elements for product innovation risk management, the author discussed the process of bayesian risk decision-making in product innovation. Thus to providing references for scientific decision of innovation activities in enterprises.