Models Of Economic Behavior Research Articles

Social Structures and Reputation in Expert Review Systems

We model an expert review system where two producers competing for market share each are evaluated by two raters. Employing economics experiments, the paper examines how the rater’s incentive to provide objective feedback can be distorted in the presence of social ties and different penalty structures for assigning unobjective ratings. The results reject the self-interested model. We find that raters assign more biased ratings to help the producer they know compete, and this distortion is exacerbated when the reputation cost for rating unobjectively is lowered. Counterintuitively, when both of the raters know the same producer, the likelihood of biased ratings drops significantly. To explain the empirical regularities, we develop a behavioral economics model and show that the rater’s utility function should account not only for social preferences toward the producer, but also the rater’s psychological aversion toward favoring a producer more than the other rater. Our findings demonstrate that it is critical for policymakers to be cognizant of the nonpecuniary factors that can influence behavior in expert review systems. This paper was accepted by John List, behavioral economics.

Behavioral economic demand for medications and its relation to clinical measures in multiple sclerosis.

Multiple sclerosis (MS) is a neurodegenerative disorder that causes a wide range of symptoms, which, if left untreated, worsen over time. Despite the availability of effective medications, however, many MS patients fail to take their medications. One possibility is that these patients fail to follow through on treatment recommendations because they do not value these treatments-despite their effectiveness. Prior studies have used principles of microeconomic demand to quantify subjects' valuation of commodities such as alcohol and cigarettes. The current study examined MS patients' microeconomic demand for effective treatments. Patients' willingness to purchase this effective medication was well described by behavioral economic models and was significantly related to MS knowledge and select components of adherence determination. (PsycInfo Database Record (c) 2020 APA, all rights reserved).

Tax incentives of China’s investments in Zabaykalsky Krai: implementation of behavioral economic models

Currently, the Russian regions apply a vast array of tools for regulating the investment process, including tax incentives. Active use of tax preferences is dictated by the fact that in the conditions of regional budget deficit, tax incentives, unlike subsidies, do not require direct budget expenditures for stimulating investment activity. However, the world experience demonstrates that tax incentives do not fall under the group of factors that strongly affect investment decisions. For determining the degree of preference of tax incentives in relation to other measures of regional support, a survey was carried among Chinese investors, who implement investment projects on the territory of Zabaykalsky Krai. The survey was based on a method of hierarchical analysis based on the special matrices by filed in by the investors. The acquired results displayed that out of ten measures of state support, tax incentives hold the eighth place. The calculated coefficient of the significance of tax incentives testifies to the low attractiveness of fiscal stimuli for the Chinese investors. The authora attempted to find the reasons for tax incentive not being in demand. The scientific novelty of this work consists in conducting the analysis of regional legislation that regulates the order of granting investment tax incentives based on the concept of behavioral economics. In the course of application of the provisions of behavioral economics, emphasis was made on the subjective aspect of the mechanism of preferential taxation. The reasonableness of considering such peculiarities of human mind as cognitive inertia and relativity is substantiated with regards to arranging the structure of tax incentives that would allow increasing the importance of tax incentives in formation of investment climate on the territory of Zabaykalsky Krai. The authors make recommendations on increasing the attractiveness of tax incentives among Chinese investors based on the concept of reference point and the effect of loss aversion.

Application Of Modern Models Of Behavioral Economics In Internet Branding

The present study is devoted to the problem of use of modern behavioral economics models in internet branding. The article aims to identify the most efficient instruments of internet branding for the various models of behavioral economics. Depending on the consumer behavior model it is efficient to use various instruments of the behavior economics in internet branding. In the framework of the study, the authors used methods of analysis, comparison, data analysis and systematization, comparative analysis, analogy. The novelty of the study is explained by the systematization of application of internet branding instruments depending on the models of consumer behavior. The findings of the study may be efficiently used by the marketing specialists and brand managers, who perform their operations on the internet.

СУТНІСНІ АСПЕКТИ ЗАБЕЗПЕЧЕННЯ ФІНАНСОВО -ЕКОНОМІЧНОЇ БЕЗПЕК СТРАХОВИХ КОМПАНІЙ У КОНТЕКСТІ РОЗВИТКУ КОНКУРЕНТОСПРОМОЖНОГО РИНКУ СТРАХОВИХ ПОСЛУГ

Introduction. Insurance is an important part of the formation of the financial security system of the state. Insurance in Ukraine covers less than 15% of the insurance field, which allows us to predict the rapid development of the insurance market in the near future. The insurance industry in Ukraine will be able to provide more diverse insurance services as it builds its potential. At the same time, the expansion of insurance will create space for the emergence of new threats to the normal operation of insurers, and the issue of ensuring their financial and economic security in the new operating conditions will become even more relevant.The reason for bankruptcy and liquidation of insurance companies in many cases is the low level of their financial and economic security. Therefore, it is necessary to draw the attention of the scientific community and insurance professionals to the problem of finding new opportunities to counter the risks and threats of insurance activities and to develop a mechanism for timely identification of declining financial and economic security of the insurer.Purpose. The purpose of the study is to establish areas for financial and economic security of insurance companies in the context of the development of a competitive insurance market in Ukraine. To achieve this goal, important tasks are: the study of the current state of development of the insurance market and the development of a list of practical recommendations for increasing profitability and improving the management of financial and economic security of domestic insurers.Methods. In the course of research the monographic method and a method of the theoretical analysis are used. Techniques of content analysis and synthesis are also used. The method of generalization was used in the process of forming conclusions based on the results of the study. A graphical method was used to visualize the stratistic data.Results. The article examines a set of issues related to insurance activities and ensuring its financial and economic security. The concept of financial and economic security of the insurance company, the essence and strategic aspects of its provision are studied. The definition of strategic management of financial and economic security of an insurance company is offered. The necessity of increasing the level of financial and economic security of insurers is substantiated and proposals are given on perspective directions of its improvement.Originality. The main threats for the security-oriented functioning of the competitive insurance market in Ukraine today are: cyber-attacks, lack of mechanisms to control the transparency of insurance market participants, low efficiency of regulation and quality control of insurance services, non-compliance of domestic insurance products with European standards, lack of national strategy of safety-oriented development of the insurance market. One of the main reasons for bankruptcy and liquidation of insurers is the inadequate level of their financial and economic security, which may be caused by the imbalance of insurance portfolios of companies. The main recommendations for increasing the level of profitability and modernization of financial and economic security management of insurance companies may be as follows: working out a general strategy for the development of the insurance company for five years, taking into account threats of digitalization of financial relations and trends in behavioral economics and interests of the company in the long run, ensuring the balance of the insurance portfolio, ensuring the appropriate level of qualification of employees of insurance companies, creating a separate unit for financial and economic security, developing new effective advertising strategies, implementing new insurance products (eg. cyber insurance).Conclusion. Further development of the competitive insurance market of Ukraine is impossible without ensuring financial and economic security of insurance companies in the strategic perspective, which, in turn, requires the development of theoretical and methodological provisions and practical recommendations for modernizing economic relations in the field of insurance and economic security. With the spread of digital and behavioral economic models, insurers face an important task of building a quality policy of strategic management of financial and economic security, which should be based on maintaining their proper financial condition, ensuring financial reliability and stability in the long run and tactical perspectives.

TRANSFORMATION OF BEHAVIORAL FINANCE AS A RESULT OF CHANGING MODELS OF ECONOMIC BEHAVIOR

The development of economy and its fluctuations sometimes acquire disastrous forms for countries and even the world community; and individual unexpected financial ups and downs of powerful corporations always attract attention of practitioners as well as researchers. They both look for the reasons for these phenomena, primarily referring to classical finance. However, their explanations do not always look convincing; they ignore the elusive essence of their incentive factor. And it was perseverance and a combination of the opposite that contributed to the emergence of behavioral finance, which focused the search on the social and psychological aspects of phenomena. Each period of economic development was marked by a number of authentic prerogatives and goals that shaped the behavior of the individual. Generalization of individuals similar in priorities and directions of implementation of actions formed the basis of models of economic behavior. The change in these models was due not only to scientific and technical progress, but also to the role of person in society, their identification as a separate participant or a participant of the collective society, as a component of the whole. The transition from Homo economicus, whose purpose of operation was rational egoistic enrichment, to Homo creativus, who acquires the understanding of their own identity and the need to improve and realize abilities, leads to the emergence of an opinion about the irrationality of the nature of the individual's economic behavior. Further changes in the socio-economic environment led to the formation of a behavioral model for social climbers, for whom monetary resources are not the goal for their work, but rather a means of realizing egoistic ascension. The command system formed the behavior model of Homo soveticus, which erased the boundaries of the personal for the sake of collective goals, causing the emergence of a «collective mentality». And the assertion of a democratic society of our time contributed to the emergence of RREEMM (resourceful, restricted, evaluating, expecting, maximizing man) and Click models, in which an individual shows his qualities and achieves goals in conditions of limited resources and information, but with excessive confidence in his own strengths and knowledge. and decisions in most cases are made by impulsive pressing of a button.

Digital technologies in the agricultural sector of the Russian Federation

The modern directions of the implementation, application and use of modern digital technologies in the agricultural sector are reviewed and evaluated. The implementation of the Digital AIC platform will create a new model of economic behavior of agricultural producers and give them additional income, many times exceeding all state support for the AIC. A methodology for the analysis and synthesis of the implementation of digital technologies in the Russian agro-industrial complex has been formed in the article, which will allow to determine the laws and factors of the formation of problems of the implementation of digital technologies in the agro-industrial complex, to study trends in the dynamics of digital technologies in order to identify promising areas for expanding the implementation of digital technologies. As a result of application of the methods of analysis and synthesis (literature analysis, analysis of modern documents, analysis of the results of the introduction of digital technologies), the causes and factors “inhibiting” the introduction of digital technologies in Russia are identified, trends and factors affecting the growth (decrease) rate of the introduction of digital technologies are identified in Russia.

Economic Behavior of the Indigenous Peoples in the Context of the Industrial Development of the Russian Arctic: A Gender-Sensitive Approach

This article substantiates the need for a gender-sensitive approach to research on the economic behavior of inhabitants of the Arctic in the context of the re-gion’s industrial development. The article also emphasizes one category of the economic behavior of the indigenous peoples of the North as a separate subject of research in the field of economic sociology. The purpose of the article is the development of a model of economic behavior of the residents of the Arctic in the context of industrial development in the region based on the use of methods of sociological research. The paper presents findings of research carried out in areas of the Russian Arctic where industrialization is underway, as well as the findings of a gender-sensitive survey focused on the impact of the COVID-19 pandemic on the indigenous peoples. The principal characteristics and trends of male and female economic behavior under conditions of industrial development of the Arctic have been defined from a gender-sensitive perspective by means of an example of the Arctic areas of the Sakha Republic (Iakutiia). The article offers gender-sensitive mechanisms for managerial decision making and the elimination of gender inequality in view of findings of sociological surveys in the framework of ethnic expert study and ethnosocial monitoring of the projects, as well as the development of programs of social and economic development of the region with reference to the opinions and preferences of women and men. © 2020, Slavica Publishers. All rights reserved.

Стратегічні та тактичні питання успішної трансформації бізнесу в умовах нової цифрової реальності

The article considers characteristics and key issues of successful business transformation in the digital economy and the emergence of new challenges of socio-economic development. It is proved that the development of the digital economy is accelerating due to the influence of the widespread spread of information, communication and breakthrough technologies, the emergence of a combinatorial effect based on them, which allows to obtain many new technological and managerial solutions. The nature of justified changes accompanying economic activity of business entities in the new environment, changes in the market model of economic behavior, technological infrastructure, business processes and key industries that are most affected by the breakthrough digital technologies are defined. Typical trends in the implementation of digital transformations in various industries are presented and the factors that allow to achieve success in the implementation of digital transformation projects and development degree of the basic digital infrastructure are analyzed. The main provisions of the successful digital business transformations implementation from the point of view of strategic vision are formulated and the priority tactical issues of achieving the desired level of competitiveness and maintaining leadership positions are identified.

Transformation of Value and Motivation Portrait and Model of Economic Behavior of Generation Z and Risks for Socio-Economic Systems

The state and development of socio-economic systems of different levels is influenced by the value-motivational portrait of the population. It is formed under the influence of various factors. External factors (culture, education, politics, etc.) form the special features of different generations, influencing the specifics of their behavioral models. Now a generational change is taking place in society once again. The largest group in the world is the so-called “digital generation”, which differs in many ways from previous generations. The publication highlights and systematizes the main characteristics of the new generation (value, socio-behavioral, cognitive). Also, differences were revealed in their value attitude towards violation of the norms of law and morality in the economy, and their attitude towards work (according to the criteria of social responsibility and balance between work and personal time) in comparison with older generations. Based on this, assumptions were made about what models of behavior in the socio-economic space can be expected from representatives of the digital generation. And also, what risks and threats to socio-economic systems of different levels may arise in connection with this. It was found that the younger generation is more prone to violating the norms of morality and law in socio-economic relations, less motivated in work towards social responsibility, service, and is focused on material gain, respect for their own interests and comfort. The change in the portrait of the new generation is not a random phenomenon, but a function of the degradation of culture, upbringing, education. It is also influenced by the increasing lifetime in the digital space. The models of economic behavior of the new generation will be very different from the previously existing ones, which can bring significant risks to the socio-economic development of national states, individual industries and enterprises. Systemic changes are necessary: in the state national doctrine; in the social and economic policy of the state; in the models and system of education, with the aim of forming and developing each person as a person and a professional.

Variability and Mutual Coordination of Models of Economic Behavior of Enterprises in Digital Space

Interpretation of "model of economic behavior of the enterprise" category is formed. The variability of modern models of economic behavior of enterprises in the context of the relevant criteria of generalization: the strategy of activity, the mechanism of adaptation to market conditions, transformation of economic conditions and readiness for adaptation. The mutual coordination of certain models of economic behavior of enterprises is established and characterized. The author's position on the types of models of economic behavior of enterprises: production-oriented, rent-oriented and mixed is justified. In applied aspect (on the basis of 13 enterprises) modeling of economic behavior of enterprises in interrelation with the expressed variability of models of economic behavior of the enterprises is carried out in digital space.

Economy of joint consumption as a new form of economic relations

Scientific and technological progress, the processes of globalization and internationalization have had a great influence on the development of the economy and related financial instruments, and financial technologies. To describe the model of economic behavior of individuals, the term “joint consumption economy” is widely used, which is based on the joint (collective) use of goods or services that are transferred for temporary use on a reimbursable or free basis. The analysis of information sources by the authors showed that, simultaneously with the term “sharing economy”, other concepts are used depending on the author’s point of view of the researcher and his belonging to the corresponding scientific school. The economy of joint consumption, as a model of the economy, is not new, however, in the context of the penetration of modern information and communication technologies into all spheres of the life of modern society, it received a new impetus for development and changed the structure of the relationship between consumers of goods (services) by reducing the transactional ones that arise in these processes costs, minimizing costs, reducing the number of intermediaries, increasing the number of online trading platforms and simplification of the process of providing consumers with temporary use of goods (services). The online services used in the sharing economy provide consumers with the opportunity to make more efficient, mobile and affordable the use of the resources at their disposal. To single out the volume of the economy of joint consumption among the general indicators of the national (world) economy due to the lack of a unified approach to its determination. For the effective development of the joint consumption economy, the development of the relevant regulatory legal acts is necessary, because for all its advantages there are mutual risks associated with the dishonesty of the parties involved in fulfilling their obligations.

Economic Model of Generation Z Behavior

The model of an entity that makes decision and acts in accordance with the established rules or contrary to them, participating in creation or changing of rules. All of that is a starting point for the analysis of economic processes and phenomena that are determined by the initiator of economic development - by a person. However, each generation brings its own features to economic behavior model and has its own characteristics. In this paper, the authors highlight the consequences of generation civilizational change within the framework of the digital society formation, determine the features of formation and development of the modern generation from the theoretical point of view of N. Howe and T. Strauss. Based on the data of large-scale sociological studies conducted in 2016 by Sberbank of Russia and the All-Russian Public Opinion Research Center and MAGRAM Market Research with PBN Hill Knowlton Strategies international communications agency, the features of the digital culture influence on the social model of Generation Z behavior and the problems of its formation at the present stage are determined. An emphasis is placed on its specificity and uniqueness. 4 main features of economic model of Generation Z behavior that are developed in Russia are stated and the risks associated with these features are described.

Nudging and the choice architecture of offending decisions

Research SummaryDeterring crime is often considered to be a process of information transmission (e.g., Geerken & Gove, 1975). Economic notions on incentives and choice have meshed well with this perspective (Becker, 1968; Matsueda, 2013). Behavioral economics, however, represents a source of further insights on offender decision‐making, particularly regarding information transmission to promote conformity. Pogarsky, Roche, and Pickett (2018) reviewed behavioral economic studies of offender decision‐making in criminology. In their review, they focused on prospect theory (Kahneman & Tversky, 1979), a behavioral economic model of decision‐making. More recently, Kahneman (2003, 2011) highlighted the dual‐process nature of behavioral economics, and Thaler and Sunstein (2009) elaborated some principles of nudging. These notions underscore dimensions of offending decisions beyond the perceived costs, risks, and benefits of crime.Policy ImplicationsFrom a behavioral economic standpoint, there is a choice architecture to offending decisions that permits various prosocial nudges. We analyze these ideas for possible theoretical innovations and alternative perspectives on crime policy.

Implications of Behavioral Economics for the Costs and Benefits of Fuel Economy Standards

This review focuses on recent developments in the application of behavioral economics to the evaluation of energy efficiency and greenhouse gas regulations. Transportation is the largest source of CO2 emissions from energy use in the US economy and a major and growing source worldwide. Regulating the efficiency of motor vehicles has been a core component of energy policy in the USA, the EU, China, Japan, Canada, and many other nations. Recent findings concerning consumers’ actual decision-making about energy efficiency indicate that the premises of the rational economic model are not appropriate for evaluating energy-efficiency standards. Progress in behavioral psychology and economics has shown that loss aversion, the principle that faced with a risky choice human beings tend to weigh potential losses about twice as heavily as gains, is strongly affected by framing. Simple, risky choices in which there is a status quo option generally provoke loss-averse responses. Recent analyses show that the choice to buy or not buy energy-efficiency technologies induces loss aversion and can result in systematic underinvestment in energy efficiency. Empirical investigation of consumers’ fuel economy decision-making contradicts the rational economic model and is consistent with loss aversion. However, recent economic evaluations of fuel economy and greenhouse gas regulations are explicitly or implicitly premised on rational economic behavior. Insights developed by behavioral psychologists and behavioral economists about the decision-making of real consumers provide a coherent explanation that fundamentally alters the way fuel economy regulations should be evaluated. If consumers are assumed to make decisions according to the rational economic model and markets are reasonably efficient, regulations cannot produce large private fuel savings. The behavioral economic model explains not only why such savings do exist but why consumers strongly support fuel economy regulations. The private savings from fuel economy regulations can be large relative to the social benefits of fuel economy and greenhouse gas regulations.

Long‐run Asymmetries in Labor Demand: Estimating Wage Elasticities of Labor Demand Using a Fractional Panel Probit Model

AbstractModels of labor demand usually use cost or production functions to derive profit‐maximizing firm performance. These models often rely on the assumption of symmetrical behavior, i.e., the response to a positive or negative wage shock of the same relative size is identical to the shock, and the estimated labor demand elasticities are the same for increasing and decreasing employment. However, behavioral economics models like loss aversion and endowment effects question the assumption of symmetry in labor demand. In addition, the influence of a labor shortage should be reflected in the investigations. Estimations of Fractional Panel Probit models for three different skill levels are applied to evaluate these findings with a large panel of German establishments. The results indicate asymmetrical structures for long‐run own‐wage elasticities and for some cross‐wage elasticities, putting some doubt on the assumption of strict rationality in labor demand and indicating the influence of labor shortages.

Initial validation of the Multiple-Choice procedure for measuring video game playing

The inclusion of pathological gaming behavior in the most recent editions of the Diagnostic and Statistical Manual and the International Classification of Diseases highlights the need for increased research on this emerging topic of public health concern. Behavioral economic theories have informed conceptual and treatment models of addictive behaviors and may have a similar impact on our understanding of video gaming. The current study used an online version of the Multiple-Choice Procedure (MCP) to measure the relative reinforcing value of hypothetical video game playing for different temporal magnitudes (i.e., 10, 30, and 90 min during which to play a video game) relative to alternative monetary reinforcers available immediately or after a 1-week delay. Participants completed the MCP and the Video Game Dependency Scale (VGDS) to assess problems associated with internet gaming disorder. Similar to other addictive behaviors measured with the MCP, mean crossover points increased as temporal magnitudes increased and as delay was introduced to the alternative monetary reinforcer. MCP crossover points also added to the variance accounted for in VGDS scores. Being male was a significant predictor of VGDS scores, even after accounting for their higher frequency of video game playing. The current study is the first to investigate a behavioral economics model of video game playing. The findings strengthen the notion that similar behavioral mechanisms account for a wide range of addictive behavior. Future research is needed to assess the treatment utility of the MCP and other behavioral economic measures.

The empirical relationship between nonstandard economic behaviors

We study the joint distribution of 11 behavioral phenomena in a group of 190 laboratory subjects and compare it to the predictions of existing models as a step in the development of a parsimonious, general model of economic choice. We find strong correlations between most measures of risk and time preference, between compound lottery and ambiguity aversion, and between loss aversion and the endowment effect. Our results support some, but not all attempts to unify behavioral economic phenomena. Overconfidence and gender are also predictive of some behavioral characteristics.

Anticipated Regret as an Expected Loss: The Origin of Consistent Inconsistency

In traditional and many behavioral economic models, the concept of consistency plays a crucial role. This work studies a situation in which aversive behaviors of regret and loss provoke inconsistency. However, these behaviors are predictable and consistent. This paper sheds light on consistent inconsistency preferences and shows that the consideration of loss averseness within a regret theory resists this preference mathematically. This paper also discusses the interconnection between consistent inconsistency and the cognitive dissonance theory.

Religious Identification and Attitude toward Economic Involvement among Christians and Muslims in Russia

This study presents the results of empirical research into the relationship between strength and positivity of religious identification and attitudes towards economic behavior in a group of Orthodox Christians and Sunni Muslims in Russia (N=820). In order to measure strength and positivity of religious identification, we used two components based on the Social Identity Theory. Attitudes toward models of economic behavior were measured through economic attitudes based on a scenario approach. The results revealed that attitudes towards three models of economic behavior can be clustered into a single economic involvement factor. In addition, generalized economic involvement was confirmed by CFA in both religious groups. In our study we found that strength and positivity of religious identification are differently associated with attitudes toward economic involvement in the two groups. Thus, it was concluded that the strength of religious identification negatively related to attitudes reflecting economic involvement. Positivity of religious identification was found to have a positive association with economic involvement. However, the further MGSEM demonstrated that the relationship between positivity of religious identification and economic involvement had interfaith specifics: positivity of religious identification was positively related to the models of economic involvement only in the group of Christians, while in the group of Muslims this relationship was insignificant. The results are discussed in terms of features of religious identification in these two groups.