BEHAVIORAL ECONOMICS IN THE DIGITAL AGE
BEHAVIORAL ECONOMICS IN THE DIGITAL AGE

Summary/Abstract: Behavioral economics is the link between psychological research and economics. The rise of behavioral economics is significant because people have ceased to be viewed as rational Homo Economicus. Behavioral economics gives people a role that is closer to reality, which shows that we are often irrational in our decision-making. We base our daily decisions on mental abbreviations or heuristics. In marketing, this has long been a well-known fact used to attract new customers. On the other hand, the concept of Nudge Theory means creating an environment that will use our irrationalities to make decisions that are in our best interests. In this paper, we have shown which are the most common heuristics by which people make everyday decisions. We have given examples of how these irrationalities are being used in today’s digital age for marketing and other business purposes, but also how preferred digital technologies can be used to create a positive choice architecture. In today’s digital age, when the amount of information and the speed of access to information is higher than ever before, it is increasingly difficult for people to make rational decisions. Therefore, understanding behavioral economics is very important in order to get to know and understand ourselves better and make better decisions. On the other hand, the choice architecture also raises several ethical issues, especially in the context of Digital Nudging, which need to be discussed so that the benefits of the idea of Choice Architecture in the digital age are not lost because of its abuse.

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