Understanding Consumer Behavior: Integrating Economic Constraints and Behavioral Insights

Research Article
Open access

Understanding Consumer Behavior: Integrating Economic Constraints and Behavioral Insights

Zehao Lin 1*
  • 1 Department of Economics, The Ohio State University, Columbus, USA    
  • *corresponding author lin.4528@buckeyemail.osu.edu
AEMPS Vol.187
ISSN (Print): 2754-1177
ISSN (Online): 2754-1169
ISBN (Print): 978-1-80590-173-0
ISBN (Online): 978-1-80590-174-7

Abstract

This paper investigates the multifaceted nature of consumer behavior by integrating insights from classical utility theory and behavioral economics. While traditional models emphasize rational choice under budget constraints, empirical research highlights the role of cognitive biases, social norms, and digital influences in shaping real-world decisions. The analysis explores how income effects, cultural values, information accessibility, and algorithmic personalization jointly determine consumer preferences. Case studies on health-oriented and environmentally sustainable consumption illustrate the gap between stated intentions and actual behavior, underscoring the importance of trust, labelling clarity, and cognitive ease. The findings suggest that effective policy interventions must combine economic incentives with behavioral tools such as nudges and simplified information structures. By adopting a more holistic framework, this study contributes to a deeper understanding of how individuals make choices and how those choices aggregate into broader market and social outcomes. Implications for welfare policy, sustainable consumption, and personalized regulation are also discussed.

Keywords:

Consumer Behavior, Behavioral Economics, Sustainable Consumption, Choic-e Architecture

Lin,Z. (2025). Understanding Consumer Behavior: Integrating Economic Constraints and Behavioral Insights. Advances in Economics, Management and Political Sciences,187,13-18.
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References

[1]. Vese, D. (2022). Nudge: The Final Edition edited by Richard H Thaler and Cass R Sunstein, London: Allen Lane, Penguin, 2021, edition Final, European Journal of Risk Regulation, 13(2), 350–355. https://doi.org/10.1017/err.2021.61

[2]. Bracha, Anat and Brown, Donald J., Affective Decision-Making: A Theory of Optimism-Bias (March 30, 2010). Cowles Foundation Discussion Paper No. 1759, Available at SSRN: https://ssrn.com/abstract=1581531

[3]. Mas-Colell, A., Whinston, M. D., & Green, J. R. (1995). Microeconomic Theory. Oxford University Press.

[4]. Varian, H. R. (2019). Intermediate Microeconomics: A Modern Approach (9th ed.). W.W. Norton & Company.

[5]. Cavaliere, G., Nielsen, H. B., Pedersen, R. S., & Rahbek, A. (2020). Bootstrap inference on the boundary of the parameter space, with application to conditional volatility models. Journal of Econometrics, 227(1), 241–263. https://doi.org/10.1016/j.jeconom.2020.05.006

[6]. DellaVigna, S., & Gentzkow, M. (2019). Uniform pricing in US retail chains. Quarterly Journal of Economics, 134(4), 2011–2084. https://doi.org/10.1093/qje/qjz019

[7]. Attanasio, O. P., & Pistaferri, L. (2016). Consumption inequality. Journal of Economic Perspectives, 30(2), 3–28. https://doi.org/10.1257/jep.30.2.3

[8]. Ariely, D. (2008). Predictably Irrational: The Hidden Forces That Shape Our Decisions. HarperCollins.

[9]. Zhang, W., & Wang, Y. (2025). The impact of different recommendation algorithms on consumer search behavior and merchants competition. International Review of Economics & Finance, 103943. https://doi.org/10.1016/j.iref.2025.103943

[10]. Goldfarb, A., & Tucker, C. (2019). Digital economics. Journal of Economic Literature, 57(1), 3–43. https://doi.org/10.1257/jel.20171452

[11]. Grunert, K. G., Wills, J. M., & Fernández-Celemín, L. (2010). Nutrition knowledge, and use and understanding of nutrition information on food labels among consumers in the UK. Appetite, 55(2), 177–189. https://doi.org/10.1016/j.appet.2010.05.045

[12]. Rozin, P., Fischler, C., & Shields-Argelès, C. (2009). Additivity dominance: Additives are more potent and more often lexicalized across languages than are “subtractives.” Judgment and Decision Making, 4(6), 475–478.

[13]. White, K., Habib, R., & Hardisty, D. J. (2019). How to SHIFT consumer behaviors to be more sustainable: A literature review and guiding framework. Journal of Marketing, 83(3), 22–49. https://doi.org/10.1177/0022242919825649

[14]. Sunstein, C. R. (2015). The ethics of influence: Government in the age of behavioral science. Cambridge University Press.

[15]. Schubert, C. (2017). Green nudges: Do they work? Are they ethical? Ecological Economics, 132, 329–342. https://doi.org/10.1016/j.ecolecon.2016.11.009

[16]. Allcott, H., Diamond, R., & Dubé, J. P. (2019). The geography of poverty and nutrition: Food deserts and food choices across the United States. Quarterly Journal of Economics, 134(4), 1793–1844. https://doi.org/10.1093/qje/qjz013

[17]. Loewenstein, G., Sunstein, C. R., & Golman, R. (2014). Disclosure: Psychology changes everything. Annual Review of Economics, 6, 391–419. https://doi.org/10.1146/annurev-economics-080213-041341

[18]. Grunert, K. G., Hieke, S., & Wills, J. (2014). Sustainability labels on food products: Consumer motivation, understanding and use. Food Policy, 44, 177–189. https://doi.org/10.1016/j.foodpol.2013.12.001


Cite this article

Lin,Z. (2025). Understanding Consumer Behavior: Integrating Economic Constraints and Behavioral Insights. Advances in Economics, Management and Political Sciences,187,13-18.

Data availability

The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.

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About volume

Volume title: Proceedings of ICMRED 2025 Symposium: Effective Communication as a Powerful Management Tool

ISBN:978-1-80590-173-0(Print) / 978-1-80590-174-7(Online)
Editor:Lukáš Vartiak
Conference date: 30 May 2025
Series: Advances in Economics, Management and Political Sciences
Volume number: Vol.187
ISSN:2754-1169(Print) / 2754-1177(Online)

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References

[1]. Vese, D. (2022). Nudge: The Final Edition edited by Richard H Thaler and Cass R Sunstein, London: Allen Lane, Penguin, 2021, edition Final, European Journal of Risk Regulation, 13(2), 350–355. https://doi.org/10.1017/err.2021.61

[2]. Bracha, Anat and Brown, Donald J., Affective Decision-Making: A Theory of Optimism-Bias (March 30, 2010). Cowles Foundation Discussion Paper No. 1759, Available at SSRN: https://ssrn.com/abstract=1581531

[3]. Mas-Colell, A., Whinston, M. D., & Green, J. R. (1995). Microeconomic Theory. Oxford University Press.

[4]. Varian, H. R. (2019). Intermediate Microeconomics: A Modern Approach (9th ed.). W.W. Norton & Company.

[5]. Cavaliere, G., Nielsen, H. B., Pedersen, R. S., & Rahbek, A. (2020). Bootstrap inference on the boundary of the parameter space, with application to conditional volatility models. Journal of Econometrics, 227(1), 241–263. https://doi.org/10.1016/j.jeconom.2020.05.006

[6]. DellaVigna, S., & Gentzkow, M. (2019). Uniform pricing in US retail chains. Quarterly Journal of Economics, 134(4), 2011–2084. https://doi.org/10.1093/qje/qjz019

[7]. Attanasio, O. P., & Pistaferri, L. (2016). Consumption inequality. Journal of Economic Perspectives, 30(2), 3–28. https://doi.org/10.1257/jep.30.2.3

[8]. Ariely, D. (2008). Predictably Irrational: The Hidden Forces That Shape Our Decisions. HarperCollins.

[9]. Zhang, W., & Wang, Y. (2025). The impact of different recommendation algorithms on consumer search behavior and merchants competition. International Review of Economics & Finance, 103943. https://doi.org/10.1016/j.iref.2025.103943

[10]. Goldfarb, A., & Tucker, C. (2019). Digital economics. Journal of Economic Literature, 57(1), 3–43. https://doi.org/10.1257/jel.20171452

[11]. Grunert, K. G., Wills, J. M., & Fernández-Celemín, L. (2010). Nutrition knowledge, and use and understanding of nutrition information on food labels among consumers in the UK. Appetite, 55(2), 177–189. https://doi.org/10.1016/j.appet.2010.05.045

[12]. Rozin, P., Fischler, C., & Shields-Argelès, C. (2009). Additivity dominance: Additives are more potent and more often lexicalized across languages than are “subtractives.” Judgment and Decision Making, 4(6), 475–478.

[13]. White, K., Habib, R., & Hardisty, D. J. (2019). How to SHIFT consumer behaviors to be more sustainable: A literature review and guiding framework. Journal of Marketing, 83(3), 22–49. https://doi.org/10.1177/0022242919825649

[14]. Sunstein, C. R. (2015). The ethics of influence: Government in the age of behavioral science. Cambridge University Press.

[15]. Schubert, C. (2017). Green nudges: Do they work? Are they ethical? Ecological Economics, 132, 329–342. https://doi.org/10.1016/j.ecolecon.2016.11.009

[16]. Allcott, H., Diamond, R., & Dubé, J. P. (2019). The geography of poverty and nutrition: Food deserts and food choices across the United States. Quarterly Journal of Economics, 134(4), 1793–1844. https://doi.org/10.1093/qje/qjz013

[17]. Loewenstein, G., Sunstein, C. R., & Golman, R. (2014). Disclosure: Psychology changes everything. Annual Review of Economics, 6, 391–419. https://doi.org/10.1146/annurev-economics-080213-041341

[18]. Grunert, K. G., Hieke, S., & Wills, J. (2014). Sustainability labels on food products: Consumer motivation, understanding and use. Food Policy, 44, 177–189. https://doi.org/10.1016/j.foodpol.2013.12.001