Behavioral Economic Principles Research Articles

THEORETICAL AND EXPERIMENTAL STUDY OF THE ECONOMIC BEHAVIOR IRRATIONAL COMPONENT OF UKRAINIAN SOCIETY IN SPECIFIC MARKETS

The subject matter of the article is the theoretical-methodical and applied principles of behavioural economics and their implementation in Ukrainian society. The goal of the work is to analyse the theory of irrationality in the economic context to find out what its character is in modern Ukrainian conditions, as well as to confirm the main paradoxes inherent in the individual’s decision-making behaviour. The following tasks were solved in the article: highlighting important aspects of the theory of irrationality for experimental analysis; determination of the methodology of experiments based on internationally recognized works; proposing a hypothesis regarding Ukrainian realities; conducting experiments according to the proposed methodology to test the proposed hypotheses and systematize the obtained results. The following methods are used: analytical and inductive methods for determining the set of behavioural experiments and building hypotheses regarding their results; experimental method and method of mathematical processing to check the presence of selected behavioural deviations in Ukraine. The following results were obtained: it was determined that in Ukrainian society there is a difference between the degree of individualistic attitudes in different age groups; determined change in the perception of information of different generations as a result of more significant digitization of the young population; a higher tendency of children to risk for certain conditions is determined; the similarity of the obtained results of the experiments with the global ones are established and the impact of technologies on the economic behaviour of individuals and the peculiarities caused by the historical context and expanded access to information, in general, are determined. Conclusions: the use of analytical and inductive methods in combination with an experimental approach confirmed the existence of some of the classic behavioural patterns for modern Ukrainian society, in particular: the Allais paradox, the effect of bounded rationality, the effect of joining the majority, the effect of ownership and asymmetric dominance. In addition, based on the obtained results, it was determined that for Ukraine there is a significant difference between the nature of irrationality in different age groups, however, the postulation of this statement beyond the selected target groups requires additional research, as well as consideration of the context of other market entities.

Behavioral Economics and Technology Innovation: Using Choice Architecture to Build and Scale Products

Abstract With technology being a part of our everyday lives, there has never been a more critical time to dive deeper and understand what drives us to choose specific products. The effectiveness with which technology companies use behavioral economics principles, such as choice architecture, in product development can drive better outcomes both for the organisation and the customer. The use of behavioral economics has become increasingly popular in. recent years. By leveraging insights from behavioral economics, technology companies can create products that better align with users’ needs and preferences, and that are more likely to be adopted over time. This article critically reviews existing and emerging academic research, addressing three key areas: how behavioral economics appeared and its growth in the last five decades, behavioral economics in practice through the use of Choice Architecture, and how behavioral insights are currently applied in the design of technology products. In the present study, I have undertaken a review of existing literature and research studies by analysing and synthesising key points. The review was conducted by analysing and reading existing literature on the topic, including peer-reviewed journal articles, books and industry reports. Overall, this visionary paper provides a contribution to the field of technology product development, highlighting potential strategies of using behavioral economics to better design, build and scale products.

Bitkoin i zlato kao "safe haven asset" u godinama pandemije

The pandemic that hit the world in 2020 has left unforeseeable consequences for the entire world economy. Bitcoin and gold are currencies whose prices have risen despite the crisis period. The results of the research, using Spearman's correlation coefficient, showed a statistically significant relationship between the movement of the price of bitcoin and the price of gold, which can be the basis for predicting the movement of the price of gold in the future, based on the movement of the price of bitcoin. A significant relationship was found between the movement of the bitcoin price and the increase in the number of users of bitcoin wallets, which clearly indicates an increase in the volume of trade in this currency and a wider representation of this currency. Theoretical research of behavioral economics has confirmed the hypothesis that when the financial system is exposed to a crisis, bitcoin and gold will have the characteristics of a "safe haven asset" which can be explained by the principles of behavioral economics.

УПРАВЛЕНИЕ ПРОМЫШЛЕННОЙ ПОЛИТИКОЙ РОССИЙСКОЙ ФЕДЕРАЦИИ НА ОСНОВЕ КЛАСТЕРНОГО ПОДХОДА

The changing geopolitical situation in the world inevitably causes changes within the country, including economic ones. Conditionally free principles of economics cease to work in practice, since the subjects of economic activity act in their own interests, which do not always coincide with the interests of the state. The article presents the author’s concept of implementing the industrial policy of the Russian Federation based on the principles of target-costing, behavioral economics and TBC-costing, which allows to increase the accuracy of cost planning and prices of cluster products, the objectivity of calculations between participants in a single end-to-end technological process (ESTP). In accordance with the developed concept, the theoretical foundations of the implementation of the industrial policy of the Russian Federation are developed. The methodology of forming the end-to-end cost of an industrial cluster is described, which, unlike the existing one, has high accuracy, which contributes to a more effective implementation of industrial policy. A new method of factor analysis of the cluster cost is presented, which allows to more accurately determine the causes of deviations in the value of the actual cost of the cluster from the planned one, determine the responsibility of each participant of the ESTP, including within the redistribution, and also obtain a fair mechanism for adjusting the cost of the cluster order. An algorithm for managing the order of an industrial cluster is proposed, taking into account the principle of fairness, which allows to harmonize the relationship in the chain between the state and enterprises participating in a single end-to-end technological process. The proposals of amendments to the legislative acts of the Russian Federation are presented, which make it possible to put into practice the author’s concept based on the claster-costing method to increase the effectiveness of the implementation of industrial policy.

Поведінкова економіка в реалізації соціальних ініціатив на прикладі еко-рішень

The purpose of the study is to identify opportunities for changes related to social initiatives in the field of environmental preservation and maintaining a healthy lifestyle, through the application of the achievements of behavioral economics. The article analyzes the features of the formation of the architecture of choice as an element of behavioral economics by the tools of nudging in the context of eco-solutions. It is shown that in the formation of the global goals of sustainable development, much attention is paid to the tasks of preserving the environment and saving resource consumption. In view of this, the development of programs and projects that will accelerate the achievement of these goals is extremely important both for Ukraine and for the world community in general. The expediency of applying such approaches to the formation of the architecture of choice, which can increase the level of intensity of the transition to ecological solutions, is substantiated: the option of «default» should include the element of «eco»; the importance of applying the principles of eco-design; access to eco-solutions should be at least no more difficult than traditional ones, and, speaking of an ideal, much easier; eco-solutions should be beneficial for the consumer, and the benefits are not limited to purely economic ones. The theoretical conclusions are justified by practical cases that have already been implemented and are demonstrating their effectiveness in Ukraine. The difficulties that become obstacles in the processes of environmental conservation and can be overcome by climate incentives are outlined. In general, it has been proved that behavioral economics is able to offer its tools for forming the habit of making eco-decisions in a balanced way, taking into account the need to preserve the environment. Promising directions of research are the analysis of the possibilities of implementing the principles of behavioral economics in decision-making processes in the field of education, personal development, finance, etc.

Внутрішні фактори розвитку державного фінансового моніторингу України

In the article, based on the results of the study of the main regulations for the development of financial monitoring, the internal factors of the state financial monitoring of Ukraine and their impact on the efficiency of the financial monitoring service are determined. It has been established that among the main areas of activity of the State Financial Monitoring Service, a significant area is the selection of personnel and the organization of work on the training and improvement of the qualifications of employees. Considerable attention is paid to the system of employee motivation, as one of the main factors in the development of the State Financial Monitoring System of Ukraine. The objective necessity of using not only material, but also moral stimulation of civil service workers in the motivation system is substantiated. The need to create an effective employee motivation system that would contribute to the effective development of the State Financial Monitoring Service was proven. When improving the institution's motivational strategy, it is suggested to take into account the principles of behavioral economics, which are based on the characteristics of irrational employee behavior and psychological features of human perception.

MEDICARE AND THE DYNAMICS OF US HEALTH REFORM POLITICS

Abstract Since the 2020 election, President Biden and Congressional Democrats have largely abandoned proposals for creating a “Medicare for All” system or adding a “public option” to the Affordable Care Act (ACA) marketplaces. This reflects a lack of sufficient enthusiasm, within the Congress or the public, for either option. These options are viewed by many current Medicare beneficiaries as a potential threat to their existing benefits. Indeed, framing the ACA and other efforts to expand insurance coverage as a threat to Medicare has become something that health reform opponents have done routinely since the 2010 midterm election. We will apply behavioral economics principles including loss aversion, hyperbolic discounting, and status quo bias, to explain why it has been easy to demonize reform options such as these. In addition to presenting data from public opinion polls, we will examine how Congressional and other party leaders have framed these choices for the public.

Academic service quality, student role and WOM communication in higher education

Academic service quality in higher education is co-created by all participants of the educational process, including students. Word of mouth communication (WOM) in the education sector is among the main tools to assess the level of training services. In this context, the study investigates the relationship between the student role, academic service quality, word of mouth communication, and electronic word of mouth communication in higher education. The theoretical basis of the research is the principles of behavioural economics and service-dominant logic theory, in particular. Hypotheses were tested using the structural equation model. The research data collected using the questionnaire method were obtained from 164 students in the foreign language preparatory class at a state university in Kyrgyzstan. IBM SPSS AMOS 21 package program was used to test the structural relationships in the research model. The findings showed that student role positively affected academic service quality and WOM communication. In addition, it was concluded that academic service quality positively impacted word of mouth communication, which, in turn, affected electronic word of mouth communication. Among the directions of future research are studies with a larger sample and different research methods and designs used.

Феномены квантовой экономики

The paper undertakes to analyse the changes in the economic agent which it is subject to when described from the perspective of different worldviews. The mechanistic, electrodynamic and relativistic quantum worldviews suggest different interpretations of the properties of the object, hence describe economic objects different in nature. Reliance on physicalist methods makes it possible to reveal an economic agent displaying solidarity and to outline its preconditions. The goal of this research is reconsidering the object of economics and revealing its new properties. The first task is to describe the economic agent in mechanistic terms, the second task is to add to it the properties that are drawn from quantum mechanics. The paper looks for analogies and metaphors of such phenomena as tunnel effect and duality of microparticles. It also suggests a system of institutional organization for regulating demand for different categories of goods. The theory of institutions is interpreted through the analogies of the electrodynamic worldview. The principles of behavioral economics are presented in terms of the quantum-relative worldview. The article reveals a new production factor that allows the agent to exchange the labour performed in the system of informal institutions for its analogies in the formal system. It is inferred that the peculiarities of behaviour are formed by institutions and divide agents of demand into groups. The metaphors of quantum-field experiments are revealed to explain the mechanisms of influence on these groups depending on their preferences. The paper explores the agent of demand — the purchaser — consisting of multiple households. Economic analogies are searched in the process of interpreting the law of demand and supply.

A Digital Intervention Using Daily Financial Incentives to Increase Medication Adherence in Severe Mental Illness: Single-Arm Longitudinal Pilot Study.

BackgroundMedication nonadherence is prevalent in severe mental illness and is associated with multiple negative outcomes. Mobile technology and financial incentives show promise to improve medication adherence; however, studies in mental health, especially with oral medications, are lacking.ObjectiveThe aim of this paper is to assess the feasibility and effectiveness of offering financial incentives through a mobile app based on behavioral economics principles to improve medication adherence in severe mental illness.MethodsA 10-week, single-arm longitudinal pilot study was conducted. Patients earned rewards in the context of app-based adherence incentives. The reward was split into biweekly payments made in increments of US $15, minus any US $2 per day penalties for missed check-ins. Time-varying effect modeling was used to summarize the patients’ response during the study.ResultsA total of 25 patients were enrolled in this pilot study, of which 72% (n=18) were female, and 48% (n=12) were of a White racial background. Median age was 24 (Q1-Q3: 20.5-30) years. Participants were more frequently diagnosed with schizophrenia and related disorders (n=9, 36%), followed by major depressive disorder (n=8, 32%). App engagement and medication adherence in the first 2 weeks were higher than in the last 8 weeks of the study. At study endpoint, app engagement remained high (n=24, Z=–3.17; P<.001), but medication adherence was not different from baseline (n=24, Z=–0.59; P=.28).ConclusionsFinancial incentives were effectively delivered using an app and led to high engagement throughout the study and a significantly increased medication adherence for 2 weeks. Leveraging behavioral economics and mobile health technology can increase medication adherence in the short term.Trial RegistrationClinicalTrials.gov NCT04191876; https://clinicaltrials.gov/ct2/show/NCT04191876

Maintenance effects of a gamification intervention on motivation and physical activity in patients with coronary heart disease: intermediate results of a randomized controlled trial

Abstract Background Despite the benefits of cardiac rehabilitation and secondary prevention, patients with coronary heart disease frequently fail to meet their daily physical activity goals. When one is stuck in a cycle of bad habits, changing one's behavior can be very challenging. One of the difficulties to maintaining a healthy lifestyle may be a lack of motivation. The use of game design elements (such as points, leaderboards, progress bars, and badges) in non-game contexts to promote motivation and engagement is known as gamification. It could be a powerful tool for encouraging patients to engage in physical activity. However, solid ideas that utilize the fundamental experience and psychological impacts of gaming mechanics must be built upon. Purpose The aim of this study is to look into the impact of a smartphone-based gamification intervention on physical activity engagement and other related psychological outcomes in patients with coronary heart disease, as well as the 24-week maintenance of effects beyond the 12-week intervention. Methods Participants with coronary heart disease were randomly assigned to three groups (control group, individual group and team group). The individual and team groups received gamified behavior intervention based on behavioral economic principles. Based on the Individual group, the team earned social incentives (collaboration). The intervention lasted 12 weeks, with another 12 weeks of follow-up. The primary outcomes included the change in daily steps and the proportion of patient-days that step goals achieved. The secondary outcomes included competence, autonomous, relatedness and autonomous motivation. Results The follow-up period has now been completed by 65 participants (mean age 52.8+10.3, 18.2% female) completed the follow-up period. Compared with the control group (n=17), participants in the individual group (n=25) had a significantly greater increase in mean daily steps from baseline during the intervention group (difference 956; 95% CI, 243–1623; P&amp;lt;0.01), and had a significantly greater proportion of patient-days that step goals achieved (difference 0.35; 95% CI, 0.03–0.12; P&amp;lt;0.001), competence (difference 0.5, 95% CI, 0.3–0.7; P&amp;lt;0.001), autonomous motivation (difference 3.2; 95% CI, 2.0–4.0; P&amp;lt;0.001). However, no significant difference of change in step counts was found between team group (n=23) and control group. During the follow-up period, mean daily steps and autonomous motivation in the individual declined but remained significantly greater than that in the control arm compared with baseline (steps: difference 452; 95% CI, 138–818; P&amp;lt;0.05) (motivation: difference 1.2; 95% CI, 0.3–1.8; P&amp;lt;0.05). Conclusions A smartphone-based gamification intervention was found to be an effective strategy to enhance motivation and physical activity engagement, as well as having a great maintenance effect. Funding Acknowledgement Type of funding sources: Public grant(s) – National budget only. Main funding source(s): This work is financially supported by a Construction Programme of Independent Innovation Ability of Community Health Nursing Engineering Laboratory in Jilin Province (Study code: 2020C038-8) awarded to FL.

VP.56 Perception of treatment efficacy among pediatric neurologists caring for patients with spinal muscular atrophy

The therapeutic landscape of spinal muscular atrophy (SMA) has changed over the last few years with the appearance of new treatment options. However, limited information is available about how pediatric neurologists make therapeutic decisions. The aim of this study is to assess how pediatric neurologists perceive treatment efficacy and its influence on treatment decisions applying principles of behavioral economics. We conducted a multicenter, non-interventional, cross-sectional, web-based study. Pediatric neurologists involved in the care of patients with SMA were invited to participate in the study by the Spanish society of pediatric neurology. Participants completed a survey on risk preferences and management of eleven simulated case scenarios mimicking the current treatment landscape in types I-III SMA. Participants were also exposed to four scenarios to determine their treatment expectations. Concomitant behavioral characteristics that could be associated with therapeutic decisions were assessed. A total of 35 participants completed the study. Mean age (±SD) was 40.6 (9.6) years and 62.9% were women. Fourteen (40.0%) were pediatric neurologists specialized in SMA with a mean experience of 11.5 (9.11) years. The mean (SD) participants' expectation for having an improvement by starting a therapy for type I SMA I (case#1: 5-month-old) and type II SMA (case#6: 1-year-old) were both 59.6% (22.2 and 21.5, respectively). Contrarily, the expectation for a benefit with treatment declined to 20.2% (12.2) for a case scenario representing a 16-year-old treatment naïve patients with a diagnosis of an advanced type II SMA (case#10). There was a significant difference in treatment expectation between case#1 or case#6 vs. case#10 (p<0.0001). Overall, the combination of treatment expectations for all four simulated scenarios was 43.9% (±14.6). Participants´ older age (p=0.019), lower years of experience (p=0.035), lower aversion to ambiguity (p=0.015) and lower expectation to treatment benefits (p=0.006) were associated with inertia treatment initiation. Figure 1 despite participants' expectation of treatment benefits vs. predicted probability of treatment benefit. A better knowledge of evidence-based guidelines for the management of SMA is needed to reduce bias in the perception of therapeutic efficacy.

Estimating the Cost of Wasted Energy During Overcharging Smartphones and Using COVID19 Apps

Energy wastage through irresponsible smartphone use comprises a significant sum. Using a secondary desk-based literature review, this paper evaluates con-temporary literature to calculate an approximate estimate of the amount of energy wasted through irresponsible smartphone use by US users on an annual basis. Conservative estimates purely based on overcharging of smartphones in the US suggest that the figure is in excess of US$400m per annum. A variety of factors contribute to irresponsible smartphone use, which are predominantly behavioral in nature. This paper highlights some of the impacts of excessive smartphone use and considers steps which might be taken by users themselves to reduce energy wastage during smartphone use. In addition, suggestions are made to manufac-turers to help them ‘nudge’ users into more responsible behavior through the principles of behavioral economics.

Behavioral Economics and Tobacco Control: Current Practices and Future Opportunities

Despite considerable progress, smoking remains the leading preventable cause of death in the United States. To address the considerable health and economic burden of tobacco use, the development of improved tobacco control and treatment interventions is critical. By combining elements of economics and psychology, behavioral economics provides a framework for novel solutions to treat smokers who have failed to quit with traditional smoking cessation interventions. The full range of behavioral economic principles, however, have not been widely utilized in the realm of tobacco control and treatment. Given the need for improved tobacco control and treatment, the limited use of other behavioral economic principles represents a substantial missed opportunity. For this reason, we sought to describe the principles of behavioral economics as they relate to tobacco control, highlight potential gaps in the behavioral economics tobacco research literature, and provide examples of potential interventions that use each principle.

Financial Incentives, Not Behavioral Nudges, Led to Optimized HIV Testing among Pregnant Women in a High-Burden Urban Population in Ecuador.

Behavioral economic principles are increasingly being used in the fight against HIV, including improving voluntary testing in sub-Saharan Africa and South America. However, behavioral nudges have not been widely tested as a strategy to optimize HIV testing in pregnant women. Here, we assessed whether behavioral nudges or financial incentives were effective in optimizing HIV testing among pregnant women in a high-HIV burden setting. A randomized clinical trial was conducted between May 21 and Oct 5, 2018, to allocate pregnant women in Ecuador into three study arms: information only, soft commitment (i.e., a behavioral nudge), and financial incentives. All participants received an informational flyer, including the address of a testing location. Participants in the soft-commitment arm signed and kept a form on which they committed to get tested for HIV. Those in the financial incentive arm received a $10 incentive when tested for HIV. A stepwise logistic regression analysis estimated the effect of the study arms on HIV testing rate. Participants in the financial-incentive arm had higher odds of getting an HIV test (adjusted odds ratio 17.06, P < 0.001) as compared with information-only participants. Soft-commitment had the opposite effect (adjusted odds ratio 0.14, P = 0.014). Financial incentives might be useful in improving HIV testing among pregnant women, especially among those who might be at higher risk but who have not completed an HIV test.

Modern global trends regarding the requirements for managerial competences

The article outlines the main objectives of modern management, such as the need to ensure the stability of companies or the formation of corporate culture, taking into account the principles of behavioral economics. The author highlights the growing importance of a systemic approach and democratization in management and identifies the key global trends that affect the way companies are managed. These include globalization, the focus on sustainable development, VUCA conditions, rapid technological development, changes in the nature of office and managerial work. A comparative description of industrial and post-industrial society is given to show that human capital has become a key resource while knowledge is the driving force of development. Taking into consideration these new requirements, the authors identifies the key competencies of a modern manager.

The Study of Consumer Stock Market Behaviour by Consequence of Prospect Theory

This study analyses the application of prospect theory concepts to understand stock market fluctuations. Prospect theory is the most frequently encountered alternative to utility theory when the latter is seen as insufficient in explaining empirical data. It incorporates principles of cognitive psychology and encapsulates choice behavior theories from various disciplines to put forth a more comprehensive approach in the study of patterns in consumer behavior. This research also lists various metrics to be used in the calculation of an investor’s readiness in case of an opportunity involving a risky underlying asset and further classifies investors based upon their scores in each of these five metrics. Based upon the principles of behavioral economics, this area of interest offers several challenging problems for further research and their importance is only enhanced by the ease of extension of their solutions to real world implementation.

Abstract 20: Recruitment Strategies To Increase Diversity And Enrollment In Behavioral Clinical Trials

Background: Increasing rates of obesity are a major contributor to CV disease among women of reproductive age, especially Black women. Enrollment of racially diverse populations in behavioral weight loss trials is suboptimal and may be impacted by recruitment approaches. Our objectives are to evaluate the effectiveness of recruitment strategies informed by principles of behavioral economics on the enrollment of women into a weight loss trial and to understand the impact of race and insurance. Methods: We tested 4 strategies to enroll postpartum women with CV risk factors into a behavioral weight loss trial. 1,047 individuals who met inclusion criteria in the electronic health record were randomized to receive one of two personalized emails. Email 1 stated that “we reserved a spot” in the study for the patient. Email 2 asked the patient to “commit to health.” Patients who did not respond or have an email address were then randomized to receive a mailer or mailer plus baby bib (gift). All groups were asked to sign up for a virtual information session. We compared response rates between the 2 email and 2 mail strategies. We identified participant characteristics associated with signing up using multivariate logistic regression. Results: Mean age was 31.3 years, 65% were Black and 52% had Medicaid. 1000 patients were randomized to email 1 (n=497) and email 2 (n=503). Response rates were similar in the email groups (17.7% vs. 20.3%, p=0.299). 849 patients were randomized to the mailer (n=424) or mailer plus gift (n=425). Response rates were low but did not differ by strategy (2.6% vs. 3.8%, p=0.331), and largely did not vary by race or insurance (Table). In multivariable analysis, Medicaid insurance was associated with lower odds of signing up for an info session, but race was not. Conclusion: A tailored email is a low-cost and time effective strategy to recruit racially diverse women in a behavioral weight loss trial, though women with Medicaid insurance may require additional outreach.

Leveraging financial incentives and behavioural economics to engage physicians in achieving quality-improvement process measures.

Background:Dedicated quality-improvement (QI) initiatives within health care systems are of clear benefit, and physicians respond to financial incentivization. The Canadian health care system often lacks this lever, and many financially incentivized QI programs rely on traditional economic principles. We describe our evaluation of financial incentivization for the implementation of QI process metrics in a department of surgery at a Canadian academic hospital system and its impact over a 4-year period.Methods:Quality-improvement processes informed by extant QI incentivization literature and guided by the principles of behavioural economics were implemented within our institution’s Department of Surgery. Disbursement of supplemental government funding was modified to be contingent on the ability of divisions within the department to meet predefined QI metrics, including regular multidisciplinary meetings, morbidity and mortality rounds with documented feedback of systemic issues to division members, reviews of adverse events, and implementation of annual patient experience projects. We evaluated the effect of the QI processes from 2015/16 to 2018/19.Results:There was a significant increase in the number of divisions that satisfied all the QI metrics over the study period, from 2 (28%) in 2015/16, to 5 (71%) in 2016/17, to 7 (100.0%) in 2017/18 and 2018/19 (p < 0.01). The application of behavioural economics principles, such as reward versus penalty payoff, loss aversion, payment separation, aligning of values, and relative social ranking, was important to the outcome of the study.Conclusion:Incentivizing QI activities in the Canadian health care system is possible and led to improvement in QI processes as a whole in our department. This paper lays out a method of financial reimbursement to facilitate engagement of physicians and establishment of a foundation of important QI processes and measures within a department.

Mobile health-based gamification intervention to increase physical activity participation among patients with coronary heart disease: study protocol of a randomised controlled trial

IntroductionDespite proven benefits, physical activity participation remains low in patients with coronary heart disease (CHD). Scientific evidence suggests that mobile health (mHealth)-based gamification interventions could increase physical activity levels. However,...