Economic behavior and decision making: a single case study

Abstract

The article describes the stages of the history of economic psychology and behavioral economy, shows the contribution of the Nobel Prize laureates to the study of psychological factors in the process of making an economic decision, distinguishes the theory of the expected utility of John von Neumann and O. Morgenstern. The special attention is paid to the theory of prospects D. Kahneman and A. Tverski. The first is called normative, the second is descriptive. It is stated that the second one, describing the decision-making heuristics, does not concern individual differences in this process. T.V. Kornilova in a number of studies has drawn the characteristics of the components of the intellectual-personal potential of the person who makes the decision, however the place of individuality in decision-making is also not discussed. We use the Single Case Study method, which, as opposed to the Multiple-Case Study, allows us to go beyond the scope of statistical pattern to understand an isolated case of the investigated process, revealing its indifference. There is no need to apply statistical methods and prove the existence of the links between decision making factors and data of intellectual-personal potential obtained on samples. The process of making a life-saving economic decision is analyzed by the concrete person – the researchable subject N. The material for the analysis is given by the Melbourne questionnaire, which characterizes the decision-making factors and shows the work of the cognitive systems of the researchable subject. The presence of cognitive distortion while the researchable subject is making decision based on the framing effect. With the help of a number of techniques, the components of the intellectual-personal potential of the researchable subject are diagnosed: intolerance / tolerance to uncertainty, rationality, risk-taking, intuitive ability and the use of intuition, reflexivity, self-efficacy, emotional intelligence. The internal decision-making style of the researchable subject is determined using the GDMS methodology. The tested hypotheses are: 1. The particular process of decision-making by a concrete person is reflected in the non-standard biases of this process, which are not the consequences of heuristics. 2. The decision-making of a person is based on the inherent system of reasoning and is expressed in its specific structure of the style of this process. 3. An individual case of decision-making is consistent either with a normative or with a descriptive theory and it can be describe from the view of one of them. Hypotheses 1 and 2 find endorsement in. In the decision-making process, N is the dominant factor of vigilance and the cognitive System 2, which operates rationally, operates with heuristics and interacts with System 1, which acts intuitively. It is System 1 that causes biases in the decision-making process of the researchable subject, including those that are not the result of heuristics. The process as a whole arises from the deployment of the intellectual-personal potential of the researchable subject in its components - in rationality, intolerance to uncertainty, emotional intelligence. Framing effect on the researchable subject does not apply, cognitive distortions are not detected. The making of a life-decision by the researchable subject is expressed in its inherent analytical style of this process. Hypothesis 3 does not find confirmation: neither normative nor descriptive theory covers the patterns of the decision-making process in this case. At the same time, the descriptive theory makes it possible to explain these patterns and discover a path for the further study of a remarkable role in the economic behavior of human individuality.