A Comparative Analysis of Behavioral Economics and Traditional Utility Theory in Predicting Consumer Decision-Making
Keywords:
behavioral economics, utility theory, consumer decision-making, predictive models, economic analysis, market dynamics, interdisciplinary approachAbstract
This article examines the efficacy of behavioral economics as opposed to traditional utility theory in predicting consumer decision-making processes. By integrating data from recent experiments and surveys conducted across diverse demographic groups, the paper highlights scenarios where conventional economic models fail to account for irrational behaviors exhibited by consumers. Utilizing a mixed-methods approach, we analyze case studies that illustrate the discrepancies in predictions made by both theories concerning real-world consumer choices. Our findings demonstrate that incorporating psychological factors into economic models significantly enhances predictive accuracy, offering policy implications for market regulators and businesses alike. The conclusions drawn advocate for an interdisciplinary approach to economic analysis, suggesting that future research should prioritize the integration of behavioral insights into economic modeling frameworks.
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