Authors: Dr. Rakesh Mehra, Dr. Ananya Kapoor
ABSTRACT: Behavioral economics has emerged as a critical discipline in bridging the gap between the rational decision-making models of classical economics and the reality of human behavior in managerial contexts. This paper investigates the influence of behavioral economics on managerial decision-making by exploring the role of cognitive biases, heuristics, bounded rationality, and framing effects. It further highlights real-world applications in pricing, investment, human resources, and strategic management where behavioral insights improve outcomes. By analyzing how managers can integrate nudges and behavioral frameworks into business practices, the study emphasizes the importance of shifting from purely rational assumptions toward more human centered models. The paper concludes that embedding behavioral economics into managerial decision-making enables organizations to avoid common pitfalls, improve performance, and build sustainable competitive advantage.
KEYWORDS: Behavioral Economics, Managerial Decision-Making, Cognitive Bias, Heuristics, Rationality, Business Practices
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