Behavioral Economics in Organizational Decision-Making
Behavioral economics in organizational decision-making shows that firms, governments, and complex institutions do not behave like unified optimizing agents. They decide through bounded rationality, incentive structures, group dynamics, internal narratives, and governance systems that shape what becomes visible, rewarded, or ignored. This article examines how overconfidence, escalation of commitment, conformity pressure, metric distortion, and institutional culture influence strategic choice under uncertainty. It also develops a formal analytical framework for organizational decision-making and includes substantial R and Python sections for modeling incentives, review structures, and governance regimes. The broader argument is that organizational behavior is best understood not as isolated managerial error, but as the product of institutional design under real cognitive and political constraints.









