A Behavioral Perspective on Iran's Sanctioned Economy

The sanctions have significantly impacted the economy of Iran. they caused the acting out of irrational psychological developments, which can naturally be associated with volatility. These effects are analyzed with the help of models discussed in George Akerlof and Robert Shiller's Animal Spirits, Richard Thaler and Cass Sunstein's Nudge, and Daniel Kahneman's Thinking, Fast and Slow. Animal Spirits demonstrates that fear and mistrust result in consumer stockpiling, ferreting, and avoidance of chance outcomes that fuel volatility. Nudge theory offers ways of prescribing courses of action with regard to addressing the interests of the public but in a way that does not compel people into making certain choices. Kahneman's Dual-System theory proves that we fail to make rational choices in times of stress because System-۱ overrides System-۲. To support the findings, the paper uses instances, such as Iran, and points out the principal behavioral tendencies pointing out to blocking legal implications and proposing options, including the promotion of dialogue, the equal distribution of resources, and raising public awareness of the sanctions. These insights can be used in the development of policies to eradicate the vices that cause such irrationalities to prevail over the economy. From a behavioral economics perspective, it is essential to examine how emotions, instincts, biases, and cognitive errors influence each of these four variables. These behavioral economic aspects are not limited to households and firms within society but also extend to officials and policymakers.

کلیدواژه ها:

Public Policy ، Risk and Uncertainty ، Economic Volatility ، Emotional Decision-Making