Vedic Science International Multidisciplinary Peer-reviewed Journal 

Article  Information

Journal: Vedic Science
Volume: 28 | Issue: 2 | Year: 2026
Pages: 168–171
DOI:  https://doi.org/10.66718/vsj.v28.i2.13    
Received: 25 April. 2026
Accepted:  28 June, 2026
Published: 30 June, 2026

Cognitive Biases and Economic Behavior: A Behavioral Reassessment of Decision-Making

Jaya, North East Christian University

Dr. Hari Dutt, North East Christian University

Abstract

Classical economic theory has long assumed that individuals make decisions through rational evaluation of information and stable preferences. However, interdisciplinary research demonstrates that economic choices are systematically shaped by cognitive biases—predictable deviations from rational judgment arising from heuristics, emotional influences, and bounded cognitive capacity. This paper develops a revised theoretical framework for understanding cognitive biases in economic behavior. It traces the intellectual shift from rational choice theory to bounded rationality, synthesizes major categories of cognitive biases, and evaluates their implications for consumer behavior, financial markets, labor decisions, and public policy. The paper also addresses methodological critiques and proposes an integrative behavioral–rational model. As the original document notes, cognitive biases are “not random mistakes but patterned and predictable tendencies,” and must be incorporated into modern economic theory for improved explanatory and predictive power.

Keywords

Cognitive biases, behavioral economics, bounded rationality, heuristics, economic decision-making

References

Kahneman, D. (2011). Thinking, fast and slow.

Simon, H. A. (1957). Models of man.

Thaler, R. H. (2015). Misbehaving.

Tversky, A., & Kahneman, D. (1974). Judgment under uncertainty: Heuristics and biases.

How to cite this article

Jaya, Sharma, H.D.  (2026). Cognitive Biases and Economic Behavior: A Behavioral Reassessment of Decision-Making. Vedic Science, 2026 (2), 168–171. ISSN: 0975-0312. DOI: https://doi.org/10.66718/vsj.v28.i2.13