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Theory of Boundedly Rational Planned Behavior: A New Model

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  • Ashraf Mohammad Ali

    (Faculty of Business, Sohar University, Sohar, Oman.)

Abstract

The prime intent of this article is to propose a new model in the paradigm of behavioral and business economics. To attain this objective, the study modifies a famous behavioral model of the Theory of Planned Behavior (TPB), which is based on the generalized unbounded rationality of neoclassical economics in dictating actual human behavior. Based on the idea of bounded rationality expounded by Herbert A. Simon, TPB has been modified by replacing intention variable with bounded rationality as the antecedent of actual behavior. The new model has been tested collating data collected from the participants of a Microfinance Institute currently operating in Bangladesh. Data were analyzed following the procedure of structural equation modeling (SEM). The findings of the experiment show that the new model of TBRPB’s predictability is observed to be much better than TPB which may be regarded as a basic contribution to the existing body of knowledge.

Suggested Citation

  • Ashraf Mohammad Ali, 2023. "Theory of Boundedly Rational Planned Behavior: A New Model," Zagreb International Review of Economics and Business, Sciendo, vol. 26(1), pages 1-28.
    • Handle: RePEc:vrs:zirebs:v:26:y:2023:i:1:p:1-28:n:1001
    DOI: 10.2478/zireb-2023-0001
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    References listed on IDEAS

    as
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    5. Charness, Gary & Grosskopf, Brit, 2001. "Relative payoffs and happiness: an experimental study," Journal of Economic Behavior & Organization, Elsevier, vol. 45(3), pages 301-328, July.
    6. Rabin, Matthew, 1993. "Incorporating Fairness into Game Theory and Economics," American Economic Review, American Economic Association, vol. 83(5), pages 1281-1302, December.
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    8. James G. March, 1978. "Bounded Rationality, Ambiguity, and the Engineering of Choice," Bell Journal of Economics, The RAND Corporation, vol. 9(2), pages 587-608, Autumn.
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    Keywords

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    JEL classification:

    • E7 - Macroeconomics and Monetary Economics - - Macro-Based Behavioral Economics
    • E70 - Macroeconomics and Monetary Economics - - Macro-Based Behavioral Economics - - - General
    • E71 - Macroeconomics and Monetary Economics - - Macro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on the Macro Economy

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