Behavioural Economics in Marketing: Understanding consumer Decisison Making

Abstract

Consumer decision-making, which is susceptible to emotional and social effects in addition to cognitive flaws, is the focus of behavioural economics, which integrates findings from economics and psychology. Examining the impact of behavioural economic principles such as limited rationality, prospect theory, and heuristics on customer behaviour, this abstract outlines important ideas and new developments in the field of applied behavioural economics to marketing. To determine which techniques are most successful in influencing customer decisions, we examine framing effects, anchoring, and nudging. Furthermore, the significance of data analytics and digital marketing in comprehending and capitalising on customer behaviour patterns is addressed. Businesses may boost engagement, happiness, and revenue by integrating behavioural data into marketing campaigns. In order to better understand consumer decision-making and its practical implications for marketers, the article also proposes topics for further research, such as the influence of new technology and ethical issues in consumer manipulation.