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St. Joseph’s Institute of Technology India
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BS Abdur Rahman Crescent Institute of Science and Technology India
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SRM Institute of Science and Technology , Chennai , India
Vel Tech Rangarajan Dr. Sagunthala R&D Institute of Science and Technology , Chennai , India
The paper discusses the application of behavioral economics in consumer decision-making in the sustainable product market. Behavioral economics is contrasted to the traditional economic theory, which assumes rationality of choices based on the maximization of utility, where behavioral factors, including psychological biases, social norms, and emotional reactions, are included to explain real-life behavior. The paper has emphasized that consumers tend to make irrational decisions because of biases such as loss aversion, framing effects, and limited attention. There was a strong positive correlation between social norms and willingness to pay, with consumers who viewed sustainability to be a social norm experiencing greater willingness to pay an average of 7.14% more to purchase eco-friendly products. Also, affective attitudes towards sustainability enhanced their willingness to pay an average of 6.03 % with emotionally satisfied consumers about their purchase. These psychological factors play a great role in determining what is procured in terms of green products. Through the examination of pricing schemes, marketing schemes, and social forces, the paper recommends that companies develop better arrangements that would facilitate the development of sustainable consumption. Also, the research highlights the promise of such policy interventions as nudges and eco-labeling to promote sustainable decisions. The discussion shows that the gap between purchase behavior and intentions in the environment can be closed by learning about consumer behavior based on the behavioral economics approach. Future studies ought to determine the long-term impact of behavioral interventions, the influence of emotional relationships on consumer loyalty, and how new technologies, like artificial intelligence (AI), can be used to shape sustainability-related decisions.
This is an open access article distributed under the Creative Commons Attribution Non-Commercial License (CC BY-NC) License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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