THEORETICAL BASICS AND PRACTICAL ASPECTS OF BEHAVIORAL ECONOMICS

Traditional Economics looks at the persons as at some kind of rational machine which takes into consideration all available information and then makes optimal decision. Re- ality is rather different. The behavioral economics claims that there is no rational «economic human” and probably will nev- er exist. Person’s behavior is irrational and this irrationality is not random and clueless. Vice-versa - this irrationality is systemic and predictable. Behavioral economics explores what affects people›s economic decisions and the consequences of those decisions for market prices, returns, and resource allocation. Tradition- al economic research assumes that people›s economic deci- sions are based on the rule of maximizing utility. Behavioral economics uses experiments that observe human behavior in order to uncover how we think. Behavior- al economics has been called the science of decision-making. It is a growing academic discipline which uses experiments that observe human behavior in order to uncover how we think. Behavioral economics is about understanding com- mon decision mistakes that people make and why they make them. In particular, a large aspect of behavioral economics is concerned with the gap between intention and action. Classical economic theory assumes that individuals are rational. However, in the real world, we often see irrational behavior – decisions which don›t maximize utility but can cause a loss of economic welfare. It means economists need to take into account the potential for irrationality. Successful marketers must have a profound understand- ing of the consumer’s thought process in order to create a suc- cessful marketing campaign. By understanding the consumer’s decision-making process, marketers are able to develop value propositions that really fit the consumer’s needs. The impor- tance of understanding behavioral economics for marketers is immeasurable as it allows for a better understanding of the human mind. Behavioral economics allows marketing profes- sionals to optimize marketing strategies and get real results. In the article are reviewed applied aspects of behavioral economics, also theoretical and practical results of researches. These results will be useful in company management, for pol- iticians, in private decision making as they give different per- spective to rational-functional models. In case of ignoring the interdisciplinary approaches, integration of economics and psy- chology can result in waste of resources and wrong decisions.

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THE EVOLUTION OF HOMO ECONOMICUS

MGIMO Review of International Relations ◽

10.24833/2071-8160-2016-1-46-129-142 ◽

2016 ◽

pp. 129-142

Author(s):

N. V. Komarovskaia

Keyword(s):

Decision Making ◽

Behavioral Economics ◽

Human Behavior ◽

Law And Economics ◽

Interdisciplinary Approach ◽

Economic Thought ◽

Economic Behavior ◽

Economic Research ◽

Homo Economicus ◽

Economic Decision Making

The article provides a review of the ways in which interdisciplinary research in modern economic thought gives a more realistic understanding of human behavior and economic decision making. On the one hand, economic imperialism drove wider application of economics methods across social sciences and brought about new interdisciplinary fields, such as law and economics, economic sociology, public choice theory, etc. On the other hand, the origin of behavioral economics, experimental economics, and neuroeconomics bridging psychology, neurobiology, and economics influences the change in the methodology used by the economics itself and fuels transformation of the model of rational economic behavior 'homo economicus', one of the central assumptions of the neoclassical economics. George Akerlof and Robert Shiller's animal spirits, prospect theory of Daniel Kahneman and Amos Tversky, research by Amartya Sen, Daniel McFadden, Vernon Smith, and other economists focusing on decision making either significantly limit, or supplement the homo economicus concept providing a deeper insight into the nature of human rationality. Behavioral economics has already become so strong as a separate discipline that it can be classified into two streams - Classical and Modern, and its main principles should be incorporated into a basic course of traditional economics. The achievements of behavioral economics yield higher quality of economic research and forecasting. Interdisciplinary approach to the human behavior studies and transformation of homo economicus offer new tools for the development policy making.

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Consumer Decisions as a Central Research Topic in Economic Psychology

Zeitschrift für Psychologie ◽

10.1027/2151-2604/a000080 ◽

2011 ◽

Vol 219 (4) ◽

pp. 253-254

Author(s):

Erik Hoelzl ◽

Erich Kirchler

Keyword(s):

Decision Making ◽

Behavioral Economics ◽

Scientific Community ◽

International Association ◽

Research Topic ◽

Economic Research ◽

Central Research ◽

Economic Psychology ◽

Consumer Decisions ◽

Human Decision

This section outlines the increasing interest of the scientific community in economic psychology and behavioral economics as a means to answer questions about human decision making in an economic/consumer context. It gives a quick overview of the activities of important societies in the field, such as the International Association for Research in Economic Psychology and the Society for the Advancement of Behavioral Economics, as well as periodicals devoted to psycho-economic research, including a categorization of papers published in the Journal of Economic Psychology in the period 1981–2010.

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Selected Approaches of the Behavioral Economics in Post Pandemic Management

SHS Web of Conferences ◽

10.1051/shsconf/202111503017 ◽

2021 ◽

Vol 115 ◽

pp. 03017

Author(s):

Norbert Súkeník ◽

Nadežda Jankelová

Keyword(s):

Decision Making ◽

Behavioral Economics ◽

Organizational Behavior ◽

Human Behavior ◽

Practical Application ◽

Decision Making Processes ◽

The Subject ◽

New Challenges ◽

Human Thinking ◽

Psychological Experiments

Changes in organizational behavior, decision-making processes, human thinking and action are the subject of an exploration of the increasingly popular behavioral economy. We assume that her knowledge gained from various economic or psychological experiments in recent decades can help managers understand the specifics of human behavior and action. The Covid crisis and the pitfalls it brings pose new challenges for managers. Knowledge of behavioral economics and descriptive approaches to decision making allows us to understand how people act in real conditions. This knowledge can help managers streamline management and become better leaders. The paper deals with the benefits of behavioral economics for managers in the process of “reopening” the economy and its main goal is to highlight the knowledge and solutions of behavioral economics, usable for postpandemic management. To meet the goal, it is necessary to describe the changes and new specifics of the environment affected by the pandemic crisis in the first, theoretical part of the work. After analyzing these changes and evaluating them, we look for the answers offered by behavioral economics in the final part of the paper. Based on the empirically obtained knowledge of mainly foreign authors, we present several examples of their practical application in the newly created management environment.

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SYSTEM APPROACH TO PROJECT MANAGEMENT IN CONDITION OF BEHAVIORAL ECONOMY

Management of Development of Complex Systems ◽

10.32347/2412-9933.2021.45.43-49 ◽

2021 ◽

pp. 43-49

Author(s):

Valentina Molokanova ◽

Inna Hordieieva

Keyword(s):

Decision Making ◽

Project Management ◽

Behavioral Economics ◽

Human Behavior ◽

Project Manager ◽

Systemic Approach ◽

Behavioral Approach ◽

Integration Methods ◽

Methodological Approaches ◽

The Impact

Human behavior is the most common cause of project management failure. Behavioral economics is interdisciplinary in nature and allows you to identify the psychological basis for making a project manager decisions that lead to success or failure in projects. The personality of the project manager, project teams, and a special project environment continue to dominate the analysis of human behavior in project management. The article may be of interest to scientists and project management practitioners. The aim of the work is to study the principles of decision-making in project management and the influence of behavioral economics on them. The objectives of the article are to determine the impact of behavioral economics on project management as a system, to compare the methods of hard and soft systems approaches in planning and decision-making, to develop principles and sequence of actions for project integration. Methods. When writing the article, a behavioral approach, a systematic approach, decision-making methods, heuristic methods, a soft systemic approach, a hard systemic approach, a logical-structural approach, and integration methods were used. The results of the work are to harmonize the principles of PMBoK project management standards of the announced 7th edition, ISO 21500, ISO / IEC 15288 with the principles of the management economics approach. Providing system integration based on a soft systemic approach to management, allows to more fully take into account the human factor when making decisions and serve as a tool for implementing the principles of behavioral economics. A comparative analysis of the hard and soft systemic approaches is carried out and their main differences are identified. Effective integration requires organizational, administrative and behavioral skills in managing people. The principle of innovation, the principle of flexibility to change, the principle of combined compensation and the principle of combined value are the four principles of integration. Scientific novelty. The work further developed methodological approaches to substantiating the creation and further formation of a unique mental space for project activities, by ensuring the using of methods and approaches of behavioral economics. Practical significance. The results obtained are aimed at improving methodological approaches to decision-making in project activities based on ensuring the implementation of the principles of behavioral economics. Ensuring the principles and sequence of actions for the integration of the project is aimed at increasing the number of successfully implemented projects.

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A New Model of Man in Economics

Voprosy Ekonomiki ◽

10.32609/0042-8736-2011-4-78-98 ◽

2011 ◽

pp. 78-98

Author(s):

M. Storchevoy

Keyword(s):

Behavioral Economics ◽

Human Behavior ◽

Social Factors ◽

Rational Behavior ◽

New Model ◽

Common Framework

The paper draws on the most recent research in the field of behavioral economics, neuroscience, and other disciplines and shows how biological and social factors interact and co-determine real human behavior. The author considers in detail various affects and forms of non-rational behavior. He proposes a common framework for such analysis, where each of those forms of behavior becomes the result of conscious or evolutionary-driven choice.

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Beérkezett könyvek

Magyar Pszichológiai Szemle ◽

10.1556/mpszle.63.2008.3.10 ◽

2008 ◽

Vol 63 (3) ◽

pp. 607-608

Author(s):

Csaba Pléh

Keyword(s):

Decision Making ◽

Human Mind ◽

Frankfurt Am Main ◽

Conscious Decision ◽

Better Than

ErősFerenc, LénárdKataés BókayAntal(szerk.) Typus Budapestiensis. Tanulmányok a pszichoanalízis budapesti iskolájának történetéről éshatásáról. Thalassa, Budapest, 2008, 447 oldalHargittaiIstván: Doktor DNS. Őszinte beszélgetések James D. Watsonnal. Vince Kiadó, Budapest, 2008, 223 oldalKutrovátzGábor,LángBenedekésZemplénGábor: A tudomány határa. Typotex,Budapest, 2008, 376 oldalEngerl, C. andSinger, W. (eds) Better than conscious? Decision making, the human mind, and implications for institutions . MIT Press, Cambridge, 2008, xiv + 449 oldalKondor, Zsuzsanna: Embedded thinking. Multimedia and the new rationality. Peter Lang, Frankfurt am Main, 2008, xi + 169 oldalSíklakiIstván(szerk.): Szóbeli befolyásolás. I–II. Typotex, Budapest,_n

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OPTIMAL DECISION MAKING WHEN PLANNING MOBILE COMMUNICATION NETWORKS TAKING INTO ACCOUNT A SET OF QUALITY FACTORS

Telecommunications and Radio Engineering ◽

10.1615/telecomradeng.v74.i18.40 ◽

2015 ◽

Vol 74 (18) ◽

pp. 1635-1649

Author(s):

V. M. Bezruk ◽

D. V. Chebotaryova

Keyword(s):

Decision Making ◽

Communication Networks ◽

Mobile Communication ◽

Optimal Decision ◽

Quality Factors ◽

Mobile Communication Networks ◽

Optimal Decision Making

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Tax incentives of China’s investments in Zabaykalsky Krai: implementation of behavioral economic models

Финансы и управление ◽

10.25136/2409-7802.2020.2.33353 ◽

2020 ◽

pp. 69-84

Author(s):

Evgeniya Mikhailovna Popova ◽

Irina Vitalevna Mezentseva

Keyword(s):

Behavioral Economics ◽

Tax Incentives ◽

Human Mind ◽

Investment Climate ◽

Investment Activity ◽

Investment Projects ◽

Tax Incentive ◽

Regional Budget ◽

Subjective Aspect ◽

Investment Process

Currently, the Russian regions apply a vast array of tools for regulating the investment process, including tax incentives. Active use of tax preferences is dictated by the fact that in the conditions of regional budget deficit, tax incentives, unlike subsidies, do not require direct budget expenditures for stimulating investment activity. However, the world experience demonstrates that tax incentives do not fall under the group of factors that strongly affect investment decisions. For determining the degree of preference of tax incentives in relation to other measures of regional support, a survey was carried among Chinese investors, who implement investment projects on the territory of Zabaykalsky Krai. The survey was based on a method of hierarchical analysis based on the special matrices by filed in by the investors. The acquired results displayed that out of ten measures of state support, tax incentives hold the eighth place. The calculated coefficient of the significance of tax incentives testifies to the low attractiveness of fiscal stimuli for the Chinese investors. The authora attempted to find the reasons for tax incentive not being in demand. The scientific novelty of this work consists in conducting the analysis of regional legislation that regulates the order of granting investment tax incentives based on the concept of behavioral economics. In the course of application of the provisions of behavioral economics, emphasis was made on the subjective aspect of the mechanism of preferential taxation. The reasonableness of considering such peculiarities of human mind as cognitive inertia and relativity is substantiated with regards to arranging the structure of tax incentives that would allow increasing the importance of tax incentives in formation of investment climate on the territory of Zabaykalsky Krai. The authors make recommendations on increasing the attractiveness of tax incentives among Chinese investors based on the concept of reference point and the effect of loss aversion.

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