Analysis of the Influence of Psychological Factors on Consumer behavior and the Decision-making Process

Abstract

"The theory of consumer behavior and the decision-making process has evolved, in part, due to numerous empirical studies by practitioners trying to explain the rational and irrational determinants of human choice. The article aims to analyze the influence of psychological factors on consumer behavior and decision-making. The study employs methods of analysis and synthesis to summarize information and research results on the influence of psychological factors on consumer behavior and their decision-making processes. A systematic literature review and meta-analysis were used to summarize the theoretical and practical (empirical) scientific research findings from 1954-2019, which explain the psychological factors of consumer decision-making. The article proves the evolution of research on the vital role of psychological factors in consumer decision-making and their intuitive actions that shape behavior. Experimental studies confirm the irrationality and intuitiveness of persons’ decisions when choosing due to the peculiarities of human perception and thinking. As a result, there is a shift from the theory of rational behavior to the theory of bounded rationality to explain consumer behavior. The authors have identified the evolution of theories to explain decision-making: utility maximization, consumer expectations to intuitive thinking, satisfaction, and the consumer’s sense of value in decision-making. Decision-making’s emotional and intuitive components are increasingly becoming the research subject for psychologists and behavioral economists. They have formed the theory of prospects, where the value function reflects the losses and gains of the decision-maker (DM)."