HERBERT SIMON REVISITED: BEHAVIOURALISM IN CONSUMERS PURCHASE DECISION MAKING IN CASE OF LIFE INSURANCE PRODUCTS

Purpose: The consumer decisions over the years have evolved in different ways. The management as a discipline initially evolved as a social science but later on with the application of mathematics and statistics, the scholars tried to make it more scientific and logical. The attempt was made to make the consumer decisions making as rational as possible. However in trying to attain rationality, the decision maker is only near to perfect rationality instead of perfectly rational. The authors in this paper have tried to fact check this based on study of life insurance products in order to illustrate the theory of Herbert Simon’s bounded rationality in terms of consumer decision making. Design/Methodology/Approach: The research design for the study is descriptive in nature. The study is based on primary and secondary data collected from different reports, research papers, management journals, books and other publications etc. Limitations/Future Implications: The pace of globalization backed by changes in technology and increase in per capita income will influence the consumption and behavioural patterns of consumers and hence there will be dynamism in behavioural patterns and decision making. Thus the factors which influence consumer’s decision making are bound to change in the near future. The authors have only considered the limited dimensions of the subject and hence future researchers can explore the subject further. Findings/Conclusions: The authors have found that in case of purchasing decisions of life insurance products, the buyers are not total rational and their buying decisions are largely influenced by certain behavioural attributes. Originality/Value: There are only few existing literatures and research papers which have considered the subject of behviouralism in consumer’s decision making. Analyzing the consumer’s decision making based on Herbert Simon’s behavioural approach will be unique of its kind. Keywords: Decisions, Managerial, Rationality, Bounded, Consumers.