THE ROLE OF BEHAVIOURAL ECONOMICS IN CONSUMER DECISION-MAKING

Abstract

This study examines the role of behavioural economics in consumer decision-making, with 
particular emphasis on loss aversion, anchoring, framing effects, and social influence. A quantitative research approach and cross-sectional survey design were adopted. Primary data were collected through a structured questionnaire administered to consumers, while descriptive statistics, correlation analysis, and multiple regression analysis were employed for data analysis. The empirical model examined the effects of loss aversion, anchoring, framing effects, and social influence on consumer decision-making. The illustrative results indicate that all four behavioural factors have positive and statistically significant effects on consumer decision-making, with social influence showing the strongest effect among the explanatory variables. The study concludes that behavioural economics provides a more realistic explanation of consumer choices than the 
assumption of complete rationality. It recommends greater consumer awareness of behavioural biases, transparent pricing and advertising practices, responsible use of behavioural marketing strategies, and stronger consumer protection measures. The study further recommends additional empirical research on behavioural decision-making in emerging and digital markets.