Individual

DELIVERABLE Organizational Theory

01
& Design (OTD)

Submitted by:

Name: Raies
Reg.# MMS193011

Submitted to:

S.M M.RAZA
NAQVI
 The Impact of Self-Control Bias on Consumer Financial Behavior with
Mediating Effect of Regret Aversion Bias & Moderating Effect of
Income
Consumer behavior is the study of how individual customers, groups or organizations select,
buy, use, and dispose ideas, goods, and services to satisfy their needs and wants. consumer's
emotional, mental and behavioral responses that lead him to follow these activities. It shows how
emotions, attitudes and preferences affect buying behavior. Consumer are the actors in the
market place, means that consumers are playing a various role in the market place. Starting from
the information provider, from the user to the payer and to the disposer, consumers play these
roles in the decision process. Consumers behavior may deviate from the accepted ideal of perfect
rationality in many different ways. Consumers may suffer from cognitive limitations that make
the comparison of products and prices harder or they may be prone to a wide range of behavioral
biases: They might be overoptimistic about the future or overconfident in their ability to avoid
accidents. They might be overly afraid to lose compared to the status quo and sometimes their
preferences might change from one day to the next. self-control bias impacts consumer financial
behavior with mediating effect of regret aversion bias and another viewpoint is considered to
check that how level of income moderates the relationship between self-control bias and
consumer financial behavior moreover how it moderates the relationship between loss aversion,
regret aversion bias and consumer financial behavior. Consumers behavior may deviate from the
accepted ideal of perfect rationality in many different ways. Consumers may suffer from
cognitive limitations that make the comparison of products and prices harder or they may be
prone to a wide range of behavioral biases They might be overoptimistic about the future or
overconfident in their ability to avoid accidents. One of the common views is that understanding
consumer behavior has become a factor that has a direct impact on the overall performance of the
businesses.

Self-control bias is an emotional human behavioral tendency that causes people to fail to act in
pursuit of their long-term, overarching goals because of a lack of self-discipline in the short-
term. Regret theory states that people anticipate regret if they make a wrong choice and they take
this anticipation into consideration when making decisions. loss aversion refers to people's
tendency to prefer avoiding losses to acquiring equivalent gains it is better to not lose $5 than to
find $5. The effect of a moderating variable is characterized statistically as an interaction that is,
a categorical (e.g., sex, ethnicity, class) or quantitative (e.g., level of reward) variable that affects
the direction and/or strength of the relation between dependent and independent variables. In this
Main perspective was to show that how income play a vital role to lose self-control and if they
are losing self-control how consumers behave if they are prone to risk aversion bias.