The Behavioral Economics: An Influence of Psychological Factors on the Economic Growth

Abstract

Psychology as a branch of science could not take its place in the world for a long time. This fact says about a huge omission of a horribly mass of the intelligence by a human. However psychology became more significant for people and the economy in general. Being a science that would not exist without a human, it is impossible to omit its influence in it. Therefore, the main goal of this work is to consider the influence of behavioral mechanisms on decision-making by economic agents and, as a result, on the economic growth. Openings within the frame of behavioral economics embraces both the present and the past, which are aimed at showing both the fundamental nature of this knowledge and their undisputable relevance. These factors together represent a brief history of the development of this branch of knowledge. Through the prism of the main achievements of scientists of different years in the sphere of behavioral economics, which are selected according the author's preference, the irrational behavior of consumers was analyzed. This behavior was clearly reflected in the examples, which showed simultaneously both: the main flaws of the classical macroeconomic models, and the importance of considering behavioral economics when analyzing aggregate demand and aggregate supply. Such examples were taken from foreign practice and the historical past of Russia. At the end of the analysis of the influence of behavioral factors on economic agents some conclusions occur. They were confirmed by the statistics or logical facts that flowed from the fundamental laws of macroeconomics. As a result, it was concluded that it is impossible to simply answer the question of about what the result the behavioral economy leads to (growth or decline). Because much depends on the degree of economic power of the economic agents, as well as it depends on many other factors (age of consumers, degree of education, personal characteristics of each consumer, market for analysis, state policy, mentality, etc.).

Research on Influencing Factors of Consumers' Impulsive Consumption Behavior in China from the Perspective of Behavioral Economics

“…For example, by purchasing branded clothing, luxury cars, and various luxury goods to package oneself, a large amount of funds will be used for various forms of face saving and etiquette consumption such as luxury weddings and house decoration. Therefore, this study includes four aspects in social context factors: advertising, public relations, discount coupons, and discounts [7][8]. Here, we mainly test the reliability of these four aspects.…”