Abstract
The article investigates the main stages and aspects of behavioral economics based on the works of foreign and Ukrainian scientists. The scientists’ main stages and achievements in the process of development of behavioral economics are highlighted. In accordance with the scientists’ economic and psychological approaches, the main scientific areas of behavioral economics are identified, among which we can indicate behavioral finance, which is based on the irrationality of human behavior. The main purpose of research in the field of behavioral finance is to study the impact of price changes or resource allocation on the market situation, investment sentiment, the ability to predict investor behavior, stock market value, consumption, investment and savings, and asset pricing. Knowing the main reasons for irrational actions of subjects, it is possible to manage similar situations therefore to avoid negative consequences. The main achievements of behavioral economics in the decision-making process of individuals based on the works of Nobel laureates G. Simon, D. Kahneman, M. Alli are studied. People's propensity to take risks, derive dependencies between income and losses, and people's behavior are studied using the utility function and basing on the scientists’ research and experiments. The research uses mathematical tools, such as game theory and prediction, but with the use of cognitive factors. It is determined that the study of irrationality of human behavior in trade and marketing activities for the strategic interaction of economic agents is of particular importance. It is especially important to study human social nature in the needs, desires, and goals, i.e. the use of social benefits by people. The impact of the COVID-19 pandemic on the country's economy and financial markets is becoming particularly relevant. It was found that the reaction of investors to the pandemic varies in different countries due to peculiarities of their national culture, different levels of individuality and uncertainty. This aspects are very important because the behavioral approach factors influence psychological factors, which are the most important in explaining many tasks of financial behavior for economic entities.
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