The importance of behavioural factors in crisis management

Authors

  • Monika Czerwonka Szkoła Główna Handlowa w Warszawie
  • Joanna Siembida Erasmus University Rotterdam
  • Aleksandra Staniszewska Szkoła Główna Handlowa w Warszawie

DOI:

https://doi.org/10.33119/SIP.2023.192.10

Keywords:

altruism, behavioural economics, crisis, COVID-19 pandemic

Abstract

The recent events of the past two years indicate that effective crisis management cannot ignore behavioural factors. When analysing social reactions, it becomes clear that they are far from standard, rational behaviour in exceptional conditions such as a pandemic, a migration crisis, or the threat of an armed conflict. Effective economic and financial policies of a state should be based on predictions related to herd behaviour and the theory of nudge introduced by R. Thaler and C. R. Sunstein in 2017. According to this theory, the assumptions of behavioural economics can be utilised successfully in shaping public policies with appropriate tools (simplifications, default options, framing, approximation of consequences, design, or reference to social norms).
The aim of this article is to review the use of behavioural economics tools in situations of extraordinary, unexpected, and large-scale crises. Examples of the use of behavioural innovations and herd behaviour in different contexts by the authorities from various parts of the world are presented. This review can serve as an inspiration for implementing new solutions based on the theory of nudges, herd behaviour, and the behaviour of altruistic individuals.
The article uses theories from the field of behavioural economics (the prospect theory, nudge theory) and gift economy as well as media reports on methods to combat and mitigate the negative effects of crises in the healthcare system and forced migration in different countries, including those with different cultural backgrounds. This article provides an overview of such methods and presents the mechanisms of behavioural economics that underlie them, along with the positive effects of using these methods, thereby demonstrating their effectiveness.

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References

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Published

2023-11-23

How to Cite

Czerwonka, M. ., Siembida, J. ., & Staniszewska, A. (2023). The importance of behavioural factors in crisis management. Studies and Work of the Collegium of Management and Finance , (192), 187–203. https://doi.org/10.33119/SIP.2023.192.10

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Articles