Behavioral Management And Behavioral Economics: Evaluation of the Executive in Terms of Corporate Leadership Role and Individual Investor Role

Year 2023, Volume: 5 Issue: 1, 45 - 51, 30.06.2023

Reyad Etbiga

Abstract

Behavioral management and behavioral economics are two fields that have gained increasing attention in the realm of organizational behavior and decision-making. Both fields recognize that human behavior is not always rational or predictable, and that factors such as emotions, biases, and social influence can significantly impact decision-making processes. In this article, we aim to explore the intersection of these two fields by evaluating the executive in terms of their role as a corporate leader and as an individual investor. Specifically, we will examine the tendency for self-deception in these roles, the impact of experience and reference points on decision-making, the importance of risk perception, and the influence of personal values and beliefs on decision-making processes. By analyzing these factors through the lens of behavioral management and economics, we hope to contribute to a greater understanding of the complexities of decision-making in these roles, and to identify strategies for more effective leadership and investment practices. Corporate leaders are responsible for making decisions that are in the best interest of the company, while individual investors are focused on maximizing their own personal financial gains. This can create situations where corporate leaders make decisions that may benefit the company in the long term, but may not necessarily lead to immediate gains for individual investors. In some cases, corporate leaders may prioritize their own interests over those of individual investors, leading to conflicts between the two roles. In this study, a brief review has been conducted regarding both roles. Based on relevant studies in the literature, conclusions and recommendations have been made. Surveys and scales have been used to explore the validity of these recommendations and to open the way for further research.

Keywords

Behavioral Management, Corporate Leadership Role, Individual Investor Role

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