BEHAVIOR ECONOMICS AND DECISION MAKING: AN INVESTIGATION ON THE IMPULSIVE BUYING BEHAVIOR

Abstract

Purpose: The tendency towards impulsive purchasing has become widespread in the modern consumer market, especially as the online retail platforms and the marketing policies based on the emotional appeal continued to develop. Based on the concepts of behavioral economics, the current research intends to explore the impact of emotions triggers, cognitive bias, and situational issues on impulse buying in consumers in Pakistan. It is also examined how the mediating role of cognitive biases can be applied in the correlation between emotional stimuli and impulsive buying behavior.

Design/Methodology/Approach: To determine the data about 400 consumers in the urban regions of Pakistan, the quantitative cross-sectional research design was adopted and structured self-report questionnaires were used to get the data. Impulsive buying behavior, emotional triggers, cognitive bias and situational influence were measured using standardized scales. Statistical analysis of the data was done by descriptive statistics, Pearson correlation, multiple regression analysis as well as mediation analysis with statistical software.

Findings: The findings reveal that emotional triggers are predictive of impulsive buying behavior to a large effect and are the strongest variable among the reviewed variables. The cognitive biases too were found to have a positive correlation with impulsive purchasing and were found to partially mediate the correlation between emotional triggering and buying. There are also other situational stimuli (promotional cues and shopping environments) which also led to impulsive buying tendencies but with a relatively less predictive effect. The proposed model overall explained 38% of the variation in impulsive buying behavior implying that both the internal psychological processes and external contextual cues interact in determining consumer buying decisions.

Research Limitations/Implications: The cross-sectional nature of the study and use of self-reported measures, which limits the application of causality, are a limitation. Longitudinal designs for future studies and investigation of other psychological variables like self-control, personality, and financial literacy should be taken to increase the power of explanation.

Practical Implications: The results provide significant implications to marketers and policymakers by identifying the potentials of emotional appeals, cognitive framing, and situational marketing strategies to drive the consumer purchasing behavior. This can be achieved by raising awareness among consumers about cognitive biases to enable them make more rational financial choices.

Originality/Value: The study is relevant to the body of behavioral economics literature as it incorporates the emotional, cognitive and situational approach to elucidate the impulsive purchase behaviour in the Pakistani consumer market thus generalizing the existing theory to the digital markets.