Behavioral Economics and Consumer Decision-Making: Insights from Experimental Research

Abstract

Using knowledge from experimental research, this study examines the relationship between behavioral economics and consumer decision-making. By emphasizing the cognitive biases, heuristics, and emotional aspects that affect consumer decisions, behavioral economics challenges the conventional economic assumption that rational decision-making occurs. This paper investigates how customers stray from rationality in a variety of decision-making contexts, including price, risk assessment, and time preferences, through a thorough evaluation of experimental investigations. Important discoveries show that consumer behavior is greatly influenced by elements such as social impacts, loss aversion, and framing effects. By incorporating these insights, the article gives implications for firms, marketers, and legislators that want to create more effective tactics that correspond with real consumer behavior. It also advances our understanding of the intricacies of consumer decision-making.