Economic behavior: concept, types and essence

2024 Author: Henry Conors | [email protected]. Last modified: 2024-02-12 02:40

Economy is that sphere of social activity that in one way or another affects absolutely the entire population of the planet. Any actions related to the exchange, purchase or sale, hiring of labor, are already economic. Therefore, the beginning of economic history is considered to be the beginning of human history. We are all participants in economic relations.

Essence of economic behavior

Given that we are all part of the economy and economic relations, it can be assumed that our actions play a role not only in our lives, but in the life of the whole society. Individuals, enterprises and states always strive to obtain maximum benefits at minimum costs by their actions. Thus, obtaining any benefit or profit through the use of one's resources is eq. behavior.

If we consider a single person, then the choice of the method of accumulating funds, the frequency of certain purchases, the way of earning - all this is economic behavior. It should be noted that each individualit varies and depends on many factors.

Economic human behavior in the narrow sense

If you do not look at the behavior of all people together, but focus on the motives, goals and behavior of an individual subject, then you can notice the following: each person strives for personal gain. In addition, he tries to win the maximum at the minimum cost. We all want to work less but earn more, pay less but get more.

Therefore, the economic behavior of a person in the narrow sense can be considered as a way to earn money. In this case, the following types of behavior can be distinguished: hired labor, entrepreneurship, investment, talent. Wage labor is the most common way to earn money. In this case, the choice of a job will depend on conditions, wages, habits, education, experience, and so on. The next way is entrepreneurship. In this case, economic behavior will be determined by the availability of resources and the ability to use them. Investment is a method of earning money by investing your own funds. Talent, or rather, its implementation is also a way to earn money and receive any benefits.

Factors affecting eq. behavior

If we ignore the economy, we can say that we are all completely different. We have different education, character, habits and views, families and nationalities. All this affects our lives. The same is true of human economic behavior. Our capabilities, resources and desires fully determinebehavior within the economy.

The first thing that affects eq. behavior, that is, the motives of economic behavior, is the search for profit. When choosing a bank for a deposit, a person will give preference to the one that offers more favorable conditions or a higher percentage. He will also behave when choosing a job: among the offers on the labor market, he will choose the one with the highest pay or comfortable conditions.

The next factor is habits. If a person from year to year is accustomed to buying a certain set of products, going to a limited number of shops and establishments, working in specific conditions, then this shapes his economic behavior, and even if you offer him other options, he will most likely ignore them, based on out of habits.

Behavior can also be affected by temporary goals. For example, the desire to buy an apartment can stop people from making unnecessary purchases, which a person usually makes, and encourage them to save or open a deposit.

Also, factors influencing behavior can be: economic situation, nationality, traditions, marital status, and so on.

Structure of eq. behavior

Many researchers studying economic behavior agree that the following factors can be distinguished in its structure: economic consciousness and economic culture, economic emotions, stereotypes, thinking.

Economic consciousness is the awareness and use of existing economic processes, knowledge of the law and the use of opportunities.

Economic emotions are the feelings that a person experiences in connection with the acquisition of something, the awareness of the need for action or inaction in the economic sphere. This part of the structure of economic behavior is closely related to psychology and sensations. Stereotypes and thinking are knowledge, experience and the ability to put them into practice to achieve economic goals.

Models eq. behavior

Next, consider models of economic behavior. There are many approaches to their selection, which are based on different factors. For example, monetary, investment, and entrepreneurial behavior can be noted, or models can be divided according to the principle of market organization. There are also models developed by scientists and bearing their names, for example, the Alchiyan model, the Keynes model of investment behavior, the Soros model.

All of them are quite abstract and describe the behavior of people with different resources in different economic situations. Motivation, private property, talents, education and other factors that a person can use to gain benefits can be taken as a basis.

Rational eq. behavior

When talking about rational economic behavior within the economy, one usually refers to the theory of economic man, which was developed at the end of the 19th century. According to this theory, all people involved in economic activity pursue different goals. With many goals, a person has a limited amount of resources and directs them to that areaneeds, in which their application will be most effective.

For example, with a limited amount of money, he needs to rest and buy a car. A person is forced to compare desires, the number of investments and benefits, and then make a choice in favor of one thing.

On the other hand, according to some researchers, the rationality of behavior also determines the social environment. What may be rational in one social position and environment is completely illogical in other circumstances, in another country or at another time. Thus, the concept of rational behavior is very subjective and depends on many factors.

Subjects eq. behavior

It is important to note that the subject of economic behavior within the economic system can be an individual. This is the initial unit, which has its own resources in the form of money, talent, real estate, skills and abilities, which can use them to participate in the economy.

The next subject can be a group of people. For example, people united by professional, age, national, gender, financial characteristics. Such groups influence the country's economy and can be studied separately. For example, a group united along professional lines may make certain purchases, rest, or work more depending on the holidays, the season, and so on. This has an impact on other economic areas that serve this grouping, for example, by supplying raw materials, materials orequipment, or, conversely, are serviced by this professional group. Thus, within the economy, the behavior of different groups depends on each other.

The state is also the subject of economic behavior. However, only within the framework of the global economy. The economic behavior of the state depends on the state of the economy, the availability of resources, historical development.

Functions eq. behavior

Human behavior in the economy as a system performs a number of functions.

The first function of economic behavior is socializing. In the process of exchange, consumption, production, and so on, people go through a process of socialization. They communicate, exchange information, experience, learn.

Adaptive. It is economic behavior that makes it possible to adapt production and workers to changes in the economic situation. The desire to use their resources more efficiently makes people adapt.

Regulatory function is that in search of benefits a person reacts or does not react to proposals, changes in the economy. This leads to a backlash. Thus, market relations regulate themselves under the influence of people's behavior. Thus, the economic behavior of an individual person can affect the economy as a whole and vice versa.

Formation of eq. behavior

For the market as a whole and for those who provide a service or product, there is often a need to artificially shape or changeeconomic behavior. It's more about buying behavior here. In second place may be the choice of work or profession.

As for purchases, with the help of advertising, marketing tricks, the seller or manufacturer can create an interest in the buyer for those goods that he did not need before. To do this, it is enough to form the illusion of necessity or fashion. Thus, a person's economic behavior may change and, instead of habitual purchases or savings, he will begin to spend resources in a new direction.

Similarly, you can create prestige or devalue any profession. With competent advertising, a person can even go to a low-paid job, motivating his choice with prospects, prestige or other factors.

Since economic behavior is completely dependent on the mental and emotional state of a person, it can be influenced and changed.

Problems of eq. behavior

People behave differently. This is primarily due to personality differences. In addition, we all have different resources and goals. Problems of economic behavior are usually associated with these features.

First, the difference between resources and goals. In this case, a person is constantly faced with the question of the most efficient use of resources. The second problem is the lack of knowledge about economic processes and phenomena. Another problem of economic behavior can be a crisis, inflation, deficit and other problems of the economy itself. Traditions and stereotypes can also interfere with logical andrational behavior in the economy.

Conclusion

Economic behavior is a complex system of actions of individual subjects of the economic sphere. They affect the well-being of these entities or the entire system as a whole. Behavior in the economy can be called socio-economic behavior, since it is always determined by social and personal characteristics. However, it is this behavior that is an important part of the economy.