The Influence of economics in the Real-World Online Purchase Behavior ContextTerm paper in
economics presented to Mr. Alex Dumandan
AMA Basic Education Las Piñas
By:
Rc Follero
Brix Discutido
Nicole Ann Marcellones
Jerry Marcelo
INTRODUCTION
Behavioral economics sheds light on most every day activities and why we consume goods and
services the way we do, why we make certain choices about ourselves or others, and how we
decide courses of action. It is an incredible lens that exposes our inner biases and approaches to
decision-making. It’s one where we can more fully understand the bounds, motivations, causes,
and limitations to our decisions and actions—anything from risk to resource allocation, strategic
dependence or irrationality. The integration of neuroscience, psychology, microeconomic theory,
and social intelligence has bred a field that provides insights and underlying assumptions to our
interactions, and one that continues to influence us in our day-to-day lives. (Ava Mohsenin,
2017).
Behavioral economics combines elements of economics and psychology to understand
how and why people behave the way they do in the real world. It differs from neoclassical
economics, which assumes that most people have well-defined preferences and make wellinformed,
self-interested decisions based on those preferences. (Max Witynski).
Behavioral economics is another theme gathering strength, and it may be particularly germane to
environmental and resource economics. Consumer theory, measurement of benefits,
intergenerational discounting, mechanism design, and the role of fairness are all subjects of
importance for environmental and resource economics and they are all areas in which behavioral
economics may provide important insights.
We have included a diversity of perspectives, ranging from the skeptical to the supportive.
While not intended as a comprehensive survey of the field, these papers provide a general sense
of the scope of current research. There is growing evidence that fairness is an argument in an
individual’s utility function. If we believe that consumer sovereignty counts, why would utility
derived from perceived fairness count less than the same amount derived from any other
argument in the utility function? That is the principle subject of Johansson-Stenman’s and
Konow’s (2010) “Fair air: distributive justice and environmental economics.” We encourage you
to read this contri- bution with an open mind. Brown, G., & Hagen, D. A. (2010).
MAIN BODY
Behavioral a method of economic analysis that applies psychological insights into human
behavior to explain economic decision-making. Online shopping behavior is the process by
which consumers search for, select, purchase, use, and dispose of goods and services, over the
internet. Online shopping has grown in popularity over the years, mainly because people find it
convenient and easy to bargain shop from the comfort of their home or office. Behavioral
economics enables businesses to comprehend the concept of social norms and how they effect
their ideal customers. Then, based on the data, firms can shape views of their products so that
customers believe they are making the right choice. Using behavioral economics, organizations
can research the real world. While it will be time-consuming and more expensive, it will provide
accurate insights into economic decisions and buying. When companies understand what
motivates consumers to buy one product over another, they can take measures to meet those
expectations. That way, they will leave their competition behind and improve their sales and
performance. Behavioral economics’s potential is immense and does not have to be a lab-based
study or research. Behavioral economics can be used in the real world, and it can help
organizations improve their performance, save their resources, and increase sales.(Himanshu
Vashishtha , 2021).
While interactions in the real world shopping are mainly based on face‐to‐face activities between
consumers and service personnels, interactions in electronic commerce take place mainly
through the retailer’s Web site. This study investigated the relationship between various
characteristics of online shopping and consumer purchase behavior. Results of the online survey
with 602 Korean customers of online bookstores indicate that information quality, user interface
quality, and security perceptions affect information satisfaction and relational benefit, that, in
turn, are significantly related to each consumer’s site commitment and actual purchase behavior.
Park, C. and Kim, Y. (2003). Despite the convenience, not everyone chooses to purchase items
and services online. Some people like the idea of physically going to a store and experiencing the
shopping process. They like to touch the merchandise, try on clothing, and be around other
people. Online shopping doesn't permit shoppers to touch products or have any social interaction,
and it also doesn't allow them to take the merchandise home the same day they buy it. Other
people may worry about shopping online because they fear their credit card information will be
compromised. Since it's necessary to provide credit card information when purchasing products
online, it is possible for individuals to become victims of identity theft. Using secure servers can
help, but it's no guarantee that credit information will remain private. Another reason some
consumers avoid shopping online is the fact that they worry that the products they purchase are
not accurately portrayed in the. website's picture or that they will be of lesser quality. It's also
impossible to try on apparel bought over the Internet, so a consumer has to rely on body
measurements in order to make sure the clothing will fit properly. If the clothing arrives in the
mail and it's too small, it must be mailed back, which is a potential inconvenience that some
shoppers may not wish to face. (K T Solis, 2022)
Coronavirus impact the whole e-commerce of the world; it has changed the nature of business.
According to research 52% of consumers avoiding to go brick and mortar shopping and crowded
areas. Furthermore, 36% avoiding brick and mortar shopping until they get coronavirus vaccine.
Coronavirus effects different on different nature of products, means the impact of COVID-19 on
several product is very high and on some product less impact (Andrienko, 2020). Overall sale of
e-commerce increases because of this virus, people avoiding to go out, keeping social distance
and buying from home, working from home such as Walmart grocery e-commerce increases
74%. Moreover, the media usage also increased in this time and Facebook, google update their
features to connect more people in single time such as Facebook introduce messenger for 44
people that is competing to Zoom. Similarly, Google also launched updated version (Sarah
Davis, 2020). Top ten retail of e-commerce in pandemic is below. Abiad, A., Arao, R. M., &
Dagli, S. (2020)
CONCLUSION