Behavioural factors to analyze the readiness for individual consumption

by | Jan 16, 2020 | DOI 2018

Maya Tsoklinova, Konstantin Kolev
University of Forestry, Sofia, Bulgaria 
DOI: https://doi.org/10.31410/eraz.2018.474
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4th International Conference – ERAZ 2018 – KNOWLEDGE BASED SUSTAINABLE ECONOMIC DEVELOPMENT, Sofia- Bulgaria, June 7, 2018, CONFERENCE PROCEEDINGS published by: Association of Economists and Managers of the Balkans, Belgrade, Serbia;  Faculty of Business Studies, Mediterranean University – Podgorica, Montenegro; University of National and World Economy – Sofia, Bulgaria; Faculty of Commercial and Business Studies – Celje, Slovenia; Faculty of Applied Management, Economics and Finance – Belgrade, Serbia, ISBN 978-86-80194-12-7

Abstract

The basis of behavioral economics is the belief that, with the help of the realism that is characteristic of psychological theory, the economic analysis would be enriched and this would in turn improve the methodological apparatus of economic science. This improvement will lead to the generation of new theoretical insights, making better predictions of studied economic phenomena and processes. This process of enriching the economic instrumentation does not imply rejection of the neoclassical approach to the economy, based on maximizing utility, achieving equilibrium and generating efficiency, but only to enrich and further develop it. The neoclassical approach is useful because it gives economists a theoretical framework that can be applied to almost every form of economic (even non-economic) behavior [1]. A particular focus in this report is on the identification of a set of behavioral factors that are relevant to the readiness of individuals to consume certain products. J. Hammond, R. Keenny and H. Raffa publish an article that describes seven psychological traps that can negatively affect decision-making and, hence, consumer behavior [3]. D. Kanev and V. Terziev, in their paper “Behavioral Economy: Development, State and Perspectives,” outline and describe these trapping factors of consumer behaviour [2]. The purpose of this report is to investigate these behavioral factors on the readiness of individual consumption and to draw conclusions and recommendations on their role and place in neoclassical economic theory. 

Key words

behavioral economics, factors, neoclassical economic theory, economic research tool


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