Why do people behave differently from what reason would dictate? Why do we support sustainability in principle, but not in practice? Why do incentives aimed at promoting more economical behavior often fail, even when they lead to tangible savings? How do individuals become excessively indebted, purchase unnecessary goods, and maintain harmful lifestyle habits? Can small incentives change behavior more effectively than large-scale information campaigns? Why do people abandon sustainable behavior and revert to old habits once incentives disappear? If people truly care about sustainability, as reason suggests they should, why are incentives necessary at all, and why does our collective behavior so often move in the opposite direction?
These and related questions are explored in the book Behavioral Economics for Sustainable Development (Belgrade, Institute of Social Sciences, 2023) by Predrag Jovanović, which serves as the occasion for this discussion.
One of the key issues addressed by behavioral economics is the gap between rational decision-making and the way people actually behave in real life. Unlike rational choice theory, which assumes that individuals always make reasonable decisions in their own best interest, behavioral economics demonstrates that this is most often not the case in practice. The reasons for such deviations lie in the multitude of factors influencing decision-making, which frequently lead individuals to make irrational choices and to behave in ways that differ from those predicted by strictly rational models.
Understanding how cognitive biases and irrationalities arise in the decision-making process opens up the possibility for governments to design incentive systems that indirectly steer individual behavior in desired directions. At the same time, this raises concerns about potential misuse and manipulation of citizens, calling for careful consideration of ethical aspects and the boundaries of interventions aimed at influencing individual choices. All these elements point to the high scientific and societal relevance and timeliness of the topic addressed in the book.
In addition to the author, the discussion will feature Boris Delibašić, Full Professor at the Faculty of Organizational Sciences, and Dragana Draganac, Assistant Professor at the Faculty of Economics, University of Belgrade. The conversation will be moderated by Dr. Irena Ristić (Institute of Social Sciences).
Predrag Jovanović is a Principal Research Fellow at the Center for Economic Research of the Institute of Social Sciences and an Associate Professor at the Faculty of Organizational Sciences, University of Belgrade. His research interests include public sector management, human resource management, behavioral economics, capital markets, and the green economy. He has more than fifteen years of practical experience in designing and implementing public policies in the field of public procurement, gained through his role as Director of the Public Procurement Office. He has participated in projects supported by IPA, UNDP, the World Bank, and USAID.
The series “Conversations About Books of the Institute of Social Sciences – Talking About…” is dedicated to publications of the Institute of Social Sciences. Through conversations with authors, the series presents the results of their research, examines the broader scientific context of the topics they address, and highlights their relevance for society and public policy.
The editor of the series is Dr. Irena Ristić (Institute of Social Sciences).