Abstract: In order to explore the impact of short-sighted cognition and herd effect on project admission decision of Internet financial platform, decision models of a single platform and industry are respectively constructed on the basis of behavioral economics theory. Then, a numerical simulation method is used to verify the model results and analyze the influence of various factors on optimal decision in combination with actual scene. The results show that short-sighted cognition affects the decision of Internet financial platform and industry, and the greater the degree of cognitive deviation, the higher the degree of irrationality of the platform, so that the decision period of the actual decision period deviates from the planning period, and more low-quality projects enter the platform and industry. In addition, the herd effect and the proportion of short-sighted platforms will also affect the actual decision of the industry, which makes a big difference between the decision bias of industry and single platform. To prevent the risks posed by the entry of too many low-quality projects, regulators should increase penalties, take more measures and reduce the short-sighted awareness of the platform, while paying attention to the impact of herd effects to avoid further spread of the negative effects of herd effects.

Key words: Internet financial platform, project admission decision, short-sighted cognition, herd effect