The influence of behavioral factors on financial decision making

Abstract

Aim. To determine the prospects of taking into account the cost estimation of behavioral factors in making financial decisions in modern conditions to ensure a decrease in the levels of fears, concerns of the entrepreneur and, as a consequence, to create conditions for increasing interest in the use of new financial instruments and opportunities for generating new ideas and development strategies.Objectives. To consider the evolution of the formation of behavioral finance from the introduction of the concept of economic man, receipt of the Nobel Prize in this field to modern research and achievements; to develop a system of behavioral factors united within the groups of financial, personnel and production factors, and to provide for the possible consequences of the impact of these factors, determining the amount of costs that will arise for the economic entity when making the appropriate financial decision; to establish the procedure for assessing behavioral factors.Methods. The authors have analyzed specialized literature in the context of the topic of this article. The research is based on the dialectical system approach, as well as logical and factor analysis, the use of general scientific methods.Results. Prospects of taking into account behavioral factors in modern conditions are determined by the reduction of the level of negative impact, fears and concerns of the entrepreneur due to the possibility of their cost estimation and creating conditions for finding more effective financial solutions based on the definition of their effectiveness indicator calculated with the costs that will arise for the economic entity when making the appropriate financial decision.Conclusions. In conditions of increasing accessibility of financial services and taking into account the developed system of behavioral factors, as well as in view of the possibility of their cost estimation, new horizons for the realization of ideas and potential are opening before economic entities.