Behavioral Economics as a Modern Market assessment tool

Abstract

The market acts as the most important component of the institution of the modern world. The market means not only the relationship between consumers and sellers, but also the external environment in which they are carried out. In turn, such market relations are significantly influenced by the totality of human choices and decisions (both rational and irrational).

To study the characteristics and degree of influence of various factors (emotional, social, etc.) on decision–making by economic entities, as well as their impact on the market as a whole, a new field of economics — behavioral economics — was institutionalized by economists. In this case, economic entities can be understood as groups of people, a single person, and corporations, enterprises, companies. Behavioral economics extends standard economic theory by taking into account the probability and impact of irrational human behavior on the market.

Thanks to the development of behavioral economics, which is based on the achievements of economic theory, psychology, (more management psychology, economic psychology), sociology, philosophy (attitude to work, money, spending, educated family and cultivated society), marketing (advertising, marketing research) and management (management decision–making, alignment and adjustment strategies, etc.), within the framework of market assessment, more objective results can be obtained, which will contribute to the improvement of decisions made.