Behavioral factors in making financial and economic decisions of economic subjects under uncertainty

Abstract

Introduction. Due to the high dynamism and unpredictability of economic processes, caused by the factors of institutional and pandemic uncertainty, the inability of the theory of rational economic behavior to fully explain their course and predict the financial and economic decisions of economic subjects is manifested. This leads to the increasing popularity of the cognitive approach in economic research. Problem Statement. Study of the influence of behavioral factors on the financial and economic decision-making of economic entities in conditions of economic uncertainty, in particular under the influence of the COVID-19 pandemic. The financial and economic behavior of economic entities cannot be considered in isolation from their individual characteristics, behavioral factors, and the influence of the external environment. The purpose of the study is to identify behavioral factors and justify their role in making financial and economic decisions by economic subjects in conditions of economic uncertainty. Methods. A set of methods of scientific knowledge, general scientific and special principles, methods, in particular structural and logical, comparative analysis, systematic approach, historical and statistical methods, classification method, etc. Results. The financial and economic behavior of economic entities cannot be considered in isolation from their individual characteristics, behavioral factors, and the influence of the external environment. The identification of behavioral factors influencing financial and economic decision-making by economic entities in conditions of uncertainty was carried out in the following areas: consumer behavior of the population; entrepreneurial activity, credit and investment activity of economic entities. It was found that when making financial decisions, they are faced with an insufficient amount of information, limited possibilities of perceiving and processing information, the influence of stereotypes and emotions formed in society. It was revealed that during the spread of the COVID-19 pandemic, changes in the behavior of economic entities occurred due to the increase in the uncertainty factor. Conclusions. Behavioral factors of financial decision-making by subjects of the regional economy are systematized, with three components being singled out: cognitive biases, emotions, framing. It is proposed to reduce the influence of behavioral factors on financial and economic decision-making using such tools as discussion, alternative, collective discussion, nudge technology, group thinking management.