Bounded Rationality of Individual Action in the Consumption of Public Goods

Abstract

In order to gain a better understanding of human behaviour, Economics seeks to work with other disciplines such as Psychology, Sociology, or Anthropology (Behavioural Economics). Unlike neoclassical economic theory, behavioural economics does not assume a rational individual. On the contrary, it focuses on an irrational (bounded rational) individual while revealing what really infl uences his decision and his actions in order to respond more adequately to public needs, increasing the effi ciency of public-service provision. Th e aim of the paper is to investigate the factors of willingness to pay for public services. Th e willingness of individuals to pay depends on factors such as aff ection and sympathy, conviction, compassion, regret, respect, warm glow, commitment to society, appreciation, invitation to participation, fundraising method and tax policy. Th e signifi cance of the research conclusions lies in initiating a new perspective on the possibilities of securing public services.