Total views : 232

About the Issue of Decision Making Irrationality in the Activity of the National Industrial Modernization Design Office


  • Ryazan State Radio Engineering University, Ryazan, Russia


Objectives: The relevance of the article has been determined by the need to study the role of government in industrial modernization in terms of establishment of national design offices. Methods/Statistical analysis: The study of the industrial modernization causes, forms and financing was made on the basis of comparative analysis. Irrational component of project selection was studied on the basis of the main provisions of behavioral finance theory, that in systemic terms provided the possibility to obtain an integrated assessment combining the investment views and the basic provisions of the theory of rational behavior. Findings: The study of the market situation influence on decision-making regarding the technological development of industrial enterprises led to the conclusion that the biggest irrationality is related to the estimate of the timing of rapid growth or downward wave, when the majority of individuals make the specified time to fit for their own strategies, ignoring objective indicators of scientific and technological progress. Analysis of reasons for the adoption of decisions on modernization, and features of its implementation, enabled to classify such decisions, which is necessary for the selection of modernization forms. A comparative analysis of utility maximization and choice alternatives when making decisions on industrial enterprise modernization made it possible to justify the need for descriptive rather than normative approach to modernization processes. The study of the behavior of the individual making decision on financing the modernization of industrial enterprises has shown that the traditional selection based on cost savings is not effective for modernization projects. Application/Improvements: The systemization of types and forms of industrial enterprise modernization has allowed proposing approaches and forms, countervailing the irrationality of the project selection, and practical recommendations for the national design office portfolio formation regarding the industry modernization.


Irrational Choice, Market Design Office, Modernization.

Full Text:

 |  (PDF views: 182)


  • Solow RM. A Contribution to the Theory of Economic Growth, The Quarterly Journal of Economics. 1956; 70(1):65–94.
  • Toward a new strategy for development: a Rothko Chapel Colloquium. /science/ book/9780080239132.Date Accessed:1979.
  • Schumpeter J. Theory of Economic Development: A study of business profits, capital, credit, interest and economic activity cycle, Transaction Publisher: London, 1934. p..255.
  • Mensch G. Stalemate in Technology: Innovations Overcome the Depression, Cambridge, Mass: Ballinger Publishing Company. 1979;15(3):806–08.
  • Eisenstadt SN. (Ed.). Social change and development. Readings in Social Evolution and Development: The Commonwealth and International Library: Readings in Sociology. Elsevier. 2013; 3–33. 10.1080/00220387208421405.
  • Huntington SP. The third wve: Democratization in the late 20th century. Vol. 4. University of Oklahoma Press. 2012. ISBN 9780806125169.
  • Inclusive Green Growth. The Pathway to Sustainable Development. The World Bank. Washington, D.C. 2012.URL: handle/10986/6058/978 0821395516. pdf?sequence=1
  • Dang G, Sui Pheng L. Infrastructure Investments in Developing Economies. Springer Singapore, 2015, 11-26. DOI 10.1007/978-981-287-248-7.
  • Lane D, Myant M. Varieties of Capitalism in PostCommunist Countries. Basingstoke: Palgrave Macmillan. 2007. DOI 10.1057/9780230627574.
  • Myant M, Drahokoupil J. International integration, varieties of capitalism and resilience to crisis in transition economies. Europe-Asia Studies. 2012; 64(1):1–33. DOI 10.1080/09668136.2012.635478.
  • Tregenna F. Deindustrialization and Reindustrialization. Pathways to Industrialization in the Twenty-First Century: New Challenges and Emerging Paradigms. Oxford Scholarship Online. 2013;76–101. DOI 10.1093/acprof: oso/9780199667857.001.0001.
  • Kovalchuk YA, Stepnov IM. On the principles of institutionalization of the state organizational platforms of economic modernization. Russia in the 21st century: global challenges and development prospects: the Fourth International Forum (Plenary lectures). Moscow: Central Economic Mathematical Institute of the Russian Academy of Sciences. 2015. 189–195. upload/materials/СБОРНИК IV ФОРУМ.pdf.
  • Kritzman M. Risk Disparity. MIT Sloan School of Management. MIT Sloan Working Paper 5001-13.
  • Cambridge, MA. 2013. wp-content/uploads/2013/07/130717-Risk-Disparity.pdf
  • Oberlehner T. FOREX Market Psychology. Moscow: SmartBook, 2012.
  • Simon GA. Rationality as a process and a product of thinking. THESIS. 1993; 3:16–38. data/003/314/1234/3_1_2Simon.pdf.
  • Sarasvathy SD. MAZES without minotaurs: Herbert Simon and the sciences of the artificial. European Management Journal. 2013; 31(1):82–87. DOI 10.1016/j.emj.2012.11.002.
  • Tversky A, Kahneman D. Advances in Prospect Theory: Cumulative Representation of Uncertainty. Readings in Formal Epistemology. Springer International Publishing. 2016; 493–519. DOI 10.1007/978-3-319-20451-2_24.
  • Jonassen DH. Designing for decision making. Educational technology research and development. 2012; 60(2):341– 359. DOI 10.1007/s11423-011-9230-5.
  • Das T K.Intelligent Techniques in Decision Making: A Survey,Indian Journal of Science and Technology. 2016 Mar, 9(12 ).


  • There are currently no refbacks.

Creative Commons License
This work is licensed under a Creative Commons Attribution 3.0 License.