APPLYING BEHAVIOURAL ECONOMICS TO THE PUBLIC AND PRIVATE SECTORS

Marine Natsvaladze

Ivane Javakhishvili Tbilisi State University

Georgia

  https://orcid.org/0000-0002-7635-8565

The Covid-19 pandemic has led to unprecedented changes in people's social and economic behavior, They had to struggle to maintain their health and earn a living at the same time. Behavioral economics has been found to be highly relevant in explaining the behavior of economic agents during the Covid-19 pandemic, under the "new normal" conditions to explain real human economic behavior [9].

Behavioral economics is an important paradigm in modern economics, and it has revolutionized the standards of economic theory and instead of rational decisions, it offers more realistic alternatives for decision-making and management - any decision should be based not on rational and mathematical calculations, but on the study of human behavior patterns, the analysis of causes and the awareness of whether how people think and how we can influence their choices by changing the content or environment during the decision-making process, without restricting the choices (Using "Nudge Theory" of behavioral economics).

The Covid-19 pandemic has raised several questions about how market participants are responding to the global pandemic. The Covid-19 pandemic was able to spread rapidly around the world, indicating that extreme measures were needed to bring it under control. The policies of governments around the world have had a significant negative impact on the economy. Taking into account these factors, the issue of studying the economic behavior of market participants in the conditions of the pandemic was put on the agenda.

Making real economic decisions based on rationality seems to be extremely difficult for all economic agents under the conditions of the Covid-19 pandemic. Therefore, when economic agents are faced with the extremely difficult situation created by the pandemic, rational economic decisions are likely to become ineffective or inefficient, and therefore the principle of "bounded rationality" described in the field of behavioral economics may become ineffective in the implementation of strategies to mitigate the consequences of the pandemic [15].

The article discusses the use of the "Nudge Theory" in the public and private sector to implement incentives in economic decision-making.

The purpose of the study: To consider a new economic policy using the approaches of behavioural economics and give recommendations on its development and implementation in the public and private sectors. Studying scientific experiments and articles by leading scientists, adapting the main conclusions, analysing the implications for policy implementation.

Methodology/approach: Analysis of field data and review of laboratory experiments based on a bibliographic review of behavioral economics.

Scientific news: Author's assessments or recommendations.

Practical value: For new courses and disciplines.

Keywords: Behavioral Economics, Economic Policy, "Nudge Theory", Incentives, Economic decision-making.