Psychological Influences on Economic Decision-Making: Analyzing Biases, Heuristics, and Consumer Behavior

Abstract

This study explores the significant influence of psychological factors on consumer decision-making, utilizing a mixed-methods approach that combines quantitative surveys and qualitative interviews. The research highlights how biases and heuristics, such as anchoring bias and overconfidence, affect economic behaviors like spending, saving, and investing. Findings reveal a strong impact of psychological tactics on consumer perceptions and actions, raising important ethical questions about the manipulation of consumer behavior. The study advocates for the integration of behavioral insights into policy and business practices to enhance consumer welfare and market fairness. Recommendations include more rigorous longitudinal research and the implementation of ethical standards to govern commercial applications of behavioral economics.