EVOLUTION OF THE THEORY OF ENTREPRENEURIAL RISK IN THE WORKS OF OUTSTANDING SCHOLARS OF THE PAST

Abstract

The article below presents the investigation of the evolution of risk theory from the 17thcentury to the present day. Recently attention to the researches of entrepreneurial risks has increased that is caused by a set of circumstances and reasons amplified. The globalization of the world economy, the political instability in the world and the imposition of economic sanctions against Russia for some companies are going to be the drivers of further development, while for others can lead to crisis and even catastrophic level of risk. Nowadays theory and practice of risk management not only have not lost their relevance, on the contrary their development is becoming increasingly important. Fundamental principles of entrepreneurial risk analysis and management were laid by great philosophers, mathematicians, economists already in 17th– 20th centuries. The definition of profit was given and also its understanding was revealed by the scientists in their works through investigation of the profit nature and the role of uncertainty in its generation. They identified the most important distinguishing features that characterized risk situations arising in the economic decision-making process under conditions of uncertainty inherent in a market economy. The greatest contribution to the development of the risk theory was a combination of economic theory, mathematics and statistics, which crystallized as an econometrics. Application of statistics and econometrics allows to quantify the expected profit, its volatility and the level of risk; on the other hand, the use of modern hardware and software makes it possible to predict the future.