HOW PSYCHOLOGICAL FACTORS INFLUENCE ECONOMIC DECISION-MAKING, AND THE IMPLICATIONS FOR POLICY

Mudasir Ahmad Sofi (Special Educator, Rehabilitation therapist, Psychologist)
Irshad Ahmad Reshi (Research Scholar Department of Economics Annamalai University Tamil Nadu)
Dr. T. Sudha (Associate Professor, Department of Economics Annamalai Uiversity Tamil Nadu)

Journal of Accounting Research, Utility Finance and Digital Assets (JARUDA)
Vol. 1 No. 4 (2023): April

Abstract Economic decision-making is often thought to be a purely rational process, with individuals making choices based on a careful analysis of costs and benefits. However, research has shown that psychological factors play a crucial role in shaping economic decisions. This paper reviews the literature on how psychological factors such as cognitive biases, emotions, and social influences influence economic decision-making. We also discuss the implications of these findings for policy-makers, highlighting the need for policies that take into account the role of psychological factors in shaping economic behavior.