Scientific and Methodological Foundations for Studying the Impact of Behavioral Finance on the Managerial Decision-Making Process

The article is devoted to the study of the scientific and methodological foundations for analyzing the impact of behavioral finance on the decision-making process in management. Behavioral finance, as an interdisciplinary field, combines elements of psychology, economics, and management theory, enabling a deeper understanding of how cognitive biases, emotional, and social factors influence decisions under conditions of uncertainty. The paper systematizes key concepts of behavioral finance, such as prospect theory, heuristics, anchoring effect, overconfidence, and endowment effect, and analyzes their influence on managerial decision-making within organizations. The purpose of the research is to develop scientific and methodological approaches to integrating behavioral finance principles into decision-making processes at various levels of management. The methods employed include analysis and synthesis to systematize existing approaches to studying behavioral finance; abstraction and concretization to identify key characteristics of behavioral factors; structural-functional analysis, empirical research, and modeling. The study explores methodological foundations encompassing both qualitative and quantitative analytical methods, including behavior modeling, scenario analysis, experimental approaches, and statistical data analysis. Special attention is paid to adapting these methods to the managerial context, where subjective factors play a crucial role. The article examines how cognitive biases – such as confirmation bias and the over-optimism effect – impact risk assessment, financial forecasting, and strategic planning. Results. Based on the research findings, a conceptual framework is proposed for incorporating behavioral indicators into financial decision-making processes. This framework includes the identification, measurement, and correction of behavioral influences. It integrates tools, methods, and organizational measures to embed behavioral financial indicators into management processes. Using the proposed framework, a matrix was developed to assess the influence of key cognitive factors on core management functions. This matrix serves as a tool to systematize and evaluate how cognitive biases and psychological aspects affect the execution of essential managerial functions, such as planning, organizing, motivating, controlling, and decision-making. Additionally, a set of recommendations is provided for implementing behavioral finance tools in management practice, including debiasing techniques, information structuring, and the evaluation of alternatives.

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Publication Details

Journal
Economic Herald of the Donbas
Published
2025-01-01
DOI
https://doi.org/10.12958/1817-3772-2025-2(80)-19-28
Primary Topic
Financial Markets and Investment Strategies
Type
article
Field-Weighted Citation Impact
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article

Scientific and Methodological Foundations for Studying the Impact of Behavioral Finance on the Managerial Decision-Making Process

Олена Сукач, Iіa CHUDAIEVA
Economic Herald of the Donbas
Financial Markets and Investment Strategies
article

Scientific and Methodological Foundations for Studying the Impact of Behavioral Finance on the Managerial Decision-Making Process

Олена Сукач, Iіa CHUDAIEVA
article en

Abstract

The article is devoted to the study of the scientific and methodological foundations for analyzing the impact of behavioral finance on the decision-making process in management. Behavioral finance, as an interdisciplinary field, combines elements of psychology, economics, and management theory, enabling a deeper understanding of how cognitive biases, emotional, and social factors influence decisions under conditions of uncertainty. The paper systematizes key concepts of behavioral finance, such as prospect theory, heuristics, anchoring effect, overconfidence, and endowment effect, and analyzes their influence on managerial decision-making within organizations. The purpose of the research is to develop scientific and methodological approaches to integrating behavioral finance principles into decision-making processes at various levels of management. The methods employed include analysis and synthesis to systematize existing approaches to studying behavioral finance; abstraction and concretization to identify key characteristics of behavioral factors; structural-functional analysis, empirical research, and modeling. The study explores methodological foundations encompassing both qualitative and quantitative analytical methods, including behavior modeling, scenario analysis, experimental approaches, and statistical data analysis. Special attention is paid to adapting these methods to the managerial context, where subjective factors play a crucial role. The article examines how cognitive biases – such as confirmation bias and the over-optimism effect – impact risk assessment, financial forecasting, and strategic planning. Results. Based on the research findings, a conceptual framework is proposed for incorporating behavioral indicators into financial decision-making processes. This framework includes the identification, measurement, and correction of behavioral influences. It integrates tools, methods, and organizational measures to embed behavioral financial indicators into management processes. Using the proposed framework, a matrix was developed to assess the influence of key cognitive factors on core management functions. This matrix serves as a tool to systematize and evaluate how cognitive biases and psychological aspects affect the execution of essential managerial functions, such as planning, organizing, motivating, controlling, and decision-making. Additionally, a set of recommendations is provided for implementing behavioral finance tools in management practice, including debiasing techniques, information structuring, and the evaluation of alternatives.

Economic Herald of the Donbas(2 (80))
Openalex Percentile: Top 65%
Financial Markets and Investment Strategies
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