Behavioral Economics and Decision Making: Evidence from Prayagraj City
Author : Sunil Kumar
Abstract :
Behavioral economics challenges the traditional economic assumption of fully rational decision-making by incorporating insights from psychology, sociology, and cognitive science. Individuals often display bounded rationality, cognitive biases, and heuristics that influence their choices in consumption, savings, investment, and other economic behaviors. This study examines behavioral patterns in decision-making among residents of Prayagraj city using a sample of 50 respondents. Through structured questionnaires and surveys, the study identifies common biases such as loss aversion, overconfidence, and present bias, and explores how these biases influence everyday economic decisions. The findings suggest that behavioral tendencies significantly affect economic choices, often leading to deviations from normative economic predictions. The study also offers policy implications and recommendations to incorporate behavioral insights into financial literacy programs and decision-making frameworks.
Keywords : Behavioral economics, decision-making, cognitive bias, heuristics, Prayagraj, economic behavior