Behavioral Economics in Information Systems Research: Critical Analysis and Research Strategies

Abstract

Theories of decision-making have long been important foundations for information systems (IS) research and much of IS is concerned with information processing for decision making. The discipline of behavioral economics (BE) provides the dominant contemporary approach for understanding human decision-making. Therefore, it is logical that IS research that involves decision making should consider BE as foundation or reference theory. Surprisingly, and despite calls for greater use of BE in IS research, it seems that IS has been slow to adopt contemporary BE as reference theory. This paper reports a critical analysis of BE in all fields of IS based on an intensive investigation of quality IS research using bibliometric content analysis. The analysis shows that IS researchers have a general understanding of BE, but their use of the theories has an ad hoc feel where only a narrow range of BE concepts and theories tend to form the foundation of IS research. The factors constraining the adoption of BE theories in IS are discussed and strategies for the use of this influential foundation theory are proposed. Guidance is provided on how BE could be used in various aspects of IS. The paper concludes with the view that BE reference theory has the potential to transform significant areas of IS research.