Journal of Emerging Trends in Economics and Management Sciences: Home

Abstract:
Behavioral economists have developed theories proving that decisions involving consumers' choices made in the market are not strictly rational but on many occasions, they are influenced by social, cognitive, psychological and emotional factors. This is in contrast to what many modern economists think. Having researched in many developing countries in the West African, the author's work supports the views that these non-rational decisions made in the market context have consequences for prices, resource allocation, and returns. In this article, the author purposes to develop on the consequences of a recent result to unearth a new theorem that challenges the principle that human rationality is not the only thing that controls market decisions but also other non-logic factors such as sentimental affection behaviors do affect decisions. The method used in this investigation was the deductive method. The deductive method, which is a scientific method, is more superior and allows empirical scientists to test its results later. The results of this article, together with behavioral concepts, direct our attention to the fact that investors and consumers' behaviors in economics do not inhere in the rational domain alone, but also on emotional factors, cognitive, and social psychological factors that powerfully influence activities in the world market and businesses. The conclusion also shows that individuals have no cognitive forebodings concerning the way they make priority needs the choice over magnitude needs in the world of economics where profit orientation task and rationality are appraised as superior to sentimental affections choice. Finally, this behavioral economics theorem will have a tremendous effect and shall illuminate the study of market behavior and finance.

Keywords: behavioral economics, decision, risk-taking, psychological, cognitive, emotional factors, finance

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