Behavioral Economics in Management Decision Making

Abstract

Behavioral economics has gained much attention in field of psychology and public policy. The field of study known as behavioral economics initially began as a purely academic attempt at modeling irrational consumer choices, thereby challenging the notion of the rational consumer of traditional economics. Management functions in 21st century workplaces have witnessed the paradigm shift in the decision making. According to Richard Thaler (Nobel Memorial Prize winner), Economic Sciences is a nudge for marketers to learn about behavioral economics. His work explains how can marketers nudge quick-thinking, short-attention consumers? This article seeks to examine and explain the difference which behavioral economics can make in formulating marketing strategies using the nudging concept given by Nobel prize winner Richard Thaler.