Abstract
This study examines how three behavioral biases (over-confidence, over-optimism, and herding) affect individuals’ decision-making in the setting of droughts, which were characterised by complexity, uncertainty, and risk. Descriptive analysis approach is used to survey individuals in Madhya Pradesh, India, which include farmers, labourers, housewives, and small business owners. The study is limited to descriptive analysis due to qualitative nature of behavioral biases. The findings validate the behavioral shortcomings in decision-making when faced with the risk of drought, resulting in insufficient preparedness. These results have important implications for policymakers and government in developing effective policies for managing drought risks. It is essential to comprehend how individuals make decisions and include behavioral aspects in policymaking.
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