IT2-based fuzzy hybrid decision making approach to soft computing

Abstract

This aims to evaluate the risk appetite of the financial investors in emerging economies using an integrated interval type-2 fuzzy model. For this purpose, eight different criteria are identified with the supporting literature. The interval type-2 fuzzy DEMAYEL approach is used to weight these criteria regarding the importance level. In addition, investors are classified into three different groups with respect to the risk appetite which are the aggressive/risk taker, moderate/risk neutral, and conservative/risk averse. Moreover, the interval type-2 fuzzy QUALIFLEX methodology is taken into consideration to rank these investor groups. The novelty of this paper is to propose a hybrid fuzzy decision-making approach to the investors' risk appetite based on the interval type-2 fuzzy sets. The findings show that aggressive investors play the most important role in emerging economies. Therefore, financial products, which offer high returns, should be developed to attract the attention of these aggressive investors. Owing to this aspect, it can be possible for emerging economies to improve their financial systems.