Understanding Behavioral Economics: A Narrative Perspective

Abstract

According to the traditional economics approach, an individual's decisions reflect that individual's best interests and are made rationally. Behavioral economics, a field of economics that integrates economics and psychology in analyzing human behavior, is important for explaining why individuals' decisions and behaviors may not reflect their best interests. A review of the literature has found that behavioral economics has significance for its power to explain individual psychological aspects of the economic decision-making process, both among individuals and institutions. The key methodological approaches deployed to write this article are desktop and library research. On the basis of the literature being reviewed, this article aims to investigate the factors that have increased interest in behavioral economics, and define the key elements of behavioral economics, its application in the public and private sectors, and criticism of behavioral economics. The discussion in this article claims that behavioral economics benefits economics by incorporating other social sciences and approaches in individual behavior and decision making. Contribution/Originality: This study contributes in the existing literature on the behavioral economics to its application in in the public and private sector. This study uses a survey of literature relating to the behavioral economics emphasizing the importance of the behavioral economics to understand consumers' behavior.

The Role of Multi Dimensional EO in the Competitive Strategy - Performance Link

“…Higher Risk Taking level entail a stronger relationship between CL and Firm Performance. The findings support (Allen et al, 2006;Sijabat, 2018) and suggest that CL requires higher upfront investment in order to achieve economic scale. In the relationship between Diff and firm performance, higher Risk Taking level entail a weaker relationship, and lower risk taking level entail a stronger relationship.…”

Organization Culture - Oriented Training Design

“…Secondly, related to the stages of training programming and implementing. In this phase, Gomes (2003) said there are at least three main stages in the training, namely: the determination of training needs, training program design, and training program evaluation (Horzum & Izci 2018;Sijabat, 2018).…”

Behavioral Economics and Decision Making: Understanding Irrationality and Biases in Economic Choices

“…Behavioral economics is a multidisciplinary field that integrates insights from psychology and economics to understand individual decision-making processes and behaviors (Sijabat, 2018). By combining psychological and economic principles, behavioral economics aims to systematically characterize decision-making preferences (MacKillop et al, 2014).…”