Psychosocial and Personality Factors in Economic Decision Making


  • Ali Ajmal Visiting Faculty, University of the Punjab, Lahore, Pakistan.
  • Rukhsana Kousar Former Vice Chancellor, Government College Women University, Sialkot, Pakistan.
  • Iram Fatima Associate Professor, Institute of Applied Psychology, University of the Punjab, Lahore, Pakistan.



Cognitive Factors, Decision Making, Economic Factors, Personality and Social Factors


Economic decision-making largely affects the lives of the people. The objective of this study was to analyze the relationship among age, gender, and personality with psychosocial factors in economic decision-making. The study sample comprised of 150 businesspersons (men = 90, women= 60). Psychosocial Factor in Economic Decision-Making Scale (Ajmal et al., 2013a, 2013b) was used to assess the psychosocial factors that affect economic decision making. The personality was evaluated using Eysenik Personality Questionnaire (Urdu version translated by Amjad & Kausar, 2001). Age was found to have a significant negative relationship with the emotional factor in economic decision-making. However, the emotional and social factors had no relationship with either of the personality dimension while the cognitive factor was found to have a significant negative relationship with neuroticism and psychoticism. Moreover, psychoticism and age negatively predicted the cognitive factor and experience in the business positively predicted the cognitive factor in economic decision-making. The findings hold implications for psychologists, economists, business personnel, and policymakers.     


Ajmal, A., Kausar, R., & Fatima, I. (2013a). Psychosocial Factor in Economic Decision-Making Scale (Unpublished Questionnaire). Institute of Applied Psychology, University of the Punjab, Lahore, Pakistan.

Ajmal, A., Kausar, R., & Fatima, I. (2013b). Psychosocial and Personality Factors in Economic Decision Making (Unpublished MPhil Thesis). Institute of Applied Psychology, University of the Punjab, Lahore, Pakistan.

Ajmal, A., Nasim, B., & Rasool, F. (2022). Psychologists as Expert Witnesses in Criminal Matters in Courts in Pakistan. Global Sociological Review, 7(4), 46-51.

Ajmal, A., & Rasool, F. (2023). Transgender Rights Law in Pakistan: Mental Health Perspective. Global Social Sciences Review, VIII(II), 420-426.

Akerlof, G. A. & Kranton, R. E. (2000). Economics and identity. Quality Journal of Economics, 115, 715-753. doi:10.1162/003355300554881

Amjad, N. & Kausar, R. (2001). Eysenck Personality Questionnaire (Urdu Translation and Adaptation in Pakistan: Unpublished Questionnaire). Institute of Applied Psychology, University of the Punjab, Lahore, Pakistan.

Anderson, J., Burks, S., DeYoung, C., & Rustichinid, A. (2011). Toward the integration of personality theory and decision theory in the explanation of economic behavior. JEL classification: D83; C72; C93.

Araujo, A., Gottlieb, D. & Moreira, H. (2007). A Model of Mixed Signals with Applications to Countersignaling and the GED. RAND Journal of Economics, 38(4), 1020-1043.

Ariely, D. (2008). Predictably irrational: The hidden forces that shape our decisions (1st ed.). New York: HarperCollins.

Baiocco, R., Laghi, F., & D'Alessio, M. (2009). Decision-making style among adolescents: Relationship with sensation seeking and locus of control. Journal of Adolescence, 32(4), 963-976.

Bargh, J. A. & Chartrand, T. L. (1999). The unbearable automaticity of being. American Psychologist, 54, 462-479.

Bean, M. (2010). The effects of personality and uncertainty on decision making process and new venture outcomes of South African Entrepreneurs. thesis/available/etd-04042011-155137/unrestricted/dissertation.pdf

Bechara, A., Damasio, H., & Damasio, A. R. (2000). Emotion, Decision Making and the Orbitofrontal Cortex. Cerebral Cortex, 10(3), 295-307.

Becker, G. S. & Murphy, K. M. (2000). Social economics: Market behavior in a social environment. Cambridge, MA: Harvard University Press.

Bernheim, B. D. & Rangel, A. (2004). Addiction and cue triggered consumption. American Economic Review, 94, 1558-1590. doi:10.1257/0002828043052222.

Best, K. (2005). Internet Finance and Frenzy at the Millennium. Consumption, Markets and Culture, 8(4), 361-378.

Borghans, L., Duckworth, A. L., Heckman, J. J., & Ter, W. B. (2008). The economics and psychology of personality traits. NBER Working Paper 13810. Cambridge, MA: National Bureau of Economic Research.

Cao, Y., Asad, M. M., Wang, L., Naz, A. & Almusharraf, N. (2022). Role of personality traits for entrepreneurial intentions of young entrepreneurs: A case study of higher education institution. Frontiers in Psychology, 13, 1-11. doi: 10.3389/fpsyg.2022.1010412

Chen, J. Q. & Lee, S. M. (2003). An exploratory cognitive DSS for strategic decision making. Decision Support Systems, 36, 147-160.

Coelho, P. (1993). The Alchemist: A Fable about Following Your Dream. Harper San Francisco, New York, USA: Easton Press

Davis, C., Patte, K., Tweed, S., & Curtis, C. (2007). Personality traits associated with decision-making deficits. Personality and Individual Differences, 42(2), 279-290.

De-Wit, H., Flory, J. D., Acheson, A., McCloskey, M., & Manuck, S. B. (2007). IQ and nonplanning impulsivity are independently associated with delay discounting in middle-aged adults. Personality and Individual Differences, 42(1), 111-121.

Eisenfuhr, F. (2011). Decision making. New York, NY: Springer.

Eysenck, H. J, Eysenck S. B. G. (1975). Manual of the Eysenck Personality Questionnaire (adult). London: Hodder, Stoughton.

Field, A. (2005). Discovering statistics using SPSS. (2nd ed.). London: Sage Publications Ltd.

Folayan, M. O., El Tantawi, M., Oginni, A., Adeniyi, A., Alade, M., & Finlayson, T. L. (2020). Psychosocial, education, economic factors, decision-making ability, and caries status of mothers of children younger than 6?years in suburban Nigeria. BMC Oral Health, 20(131).

Frey, S. B. & Stutzer, A. (2007). Economics and psychology: A promising new cross-disciplinary field. London, UK: MIT press.

Gigerenzer, G. (2001). Decision making: Non-rational theories. International Encyclopedia of the Social and Behavioral Sciences, 5, 3304–3309.

Gilbert, D. T. (2002). Inferential correction In Gilovich, T., D.Griffin, & D. Kahneman eds, Heuristics and biases: The psychology of intuitive thought (pp.167-184). New York: Cambridge University Press.

Gray, J. A. (1981). A critique of Eysenck's theory of personality. In H. J. Eysenck (Ed.), A model for personality. Berlin: Springer-Verlag

Green, D. P. & Shapiro, I. (1994). Pathologies of Rational Choice Theory: A Critique of Applications in Political Science. Yale University Press.

Ingram, D. (2013). Basic Factors of Economic Decision Making.

Kahneman, D. & Tversky, A. (1973). On the psychology of prediction, Psychological Review, 80(4), 237-251.

Kasoga, P. S. & Tegambwage, A. G. (2022). Psychological traits and investment decisions: the mediation mechanism of financial management behavior – evidence from the Tanzanian stock market. Journal of Money and Business, 2(2), 213-227.

Lauriola, M., & Levin, I. P. (2001). Personality traits and risky decision-making in a controlled experimental task: an exploratory study. Personality and Individual Differences, 31(2), 215-226.

Lizarraga, M. S., Baquedano, M. T., & Elawar, C. M. (2007). Factors that affect decision making: gender and age differences. International Journal of Psychology and Psychological Therapy, 7(3), 381-391.

Lunenburg, F. C. (2010). The Decision Making Process. National Forum of Educational Administration and Supervision Journal, 27(4), 1-12.

McCrae, R. R., & Costa, P. T., (1985). Updating Norman's "adequate taxonomy": Intelligence and personality dimensions in natural language and in questionnaires. Journal of Personality and Social Psychology, 49, 710-721.

McCreery, C. (2008). Dreams and Psychosis: A New Look at an Old Hypothesis. Former Lecturer in Experimental Psychology, Magdalen College, Oxford: Oxford University Press.

Mohr, P. N., Shu-Chen Li, & Heekeren, H. R. (2010). Neuroeconomics and aging: Neuromodulation of economic decision making in old age. Neuroscience and Biobehavioral Reviews 34, 678-688.

Mueller, G. & Plug, F. (2006). Estimating the Effect of Personality on Male and Female Earnings. Industrial and Labor Relations Review, 60(1), 3-22.

Pfister, H. & Böhm, G. (2008). The multiplicity of emotions: A framework of emotional functions in decision making. Judgment and Decision Making, 3(1), 5-17.

Polic, M. (2009). Decision making: Between rationality and reality. Interdisciplinary Description of Complex Systems, 7(2), 78-89.

Prechter, R. R. & Parker, W. D. (2007). The financial/economic dichotomy in social behavioral dynamics: the socioeconomic perspective. Journal of Behavioral Finance, 8, 84-108.

Saihani, S. B., Abdul, A. J., & Sarbini, S. (2009). The effect of big five personality in creative decision making. Creativity, Innovation and Management Proceedings of the 10th International Conference 2009 Sousse. Retrieved from:

Schröder, D., & Freedman, G. G. (2020). Decision making under uncertainty: the relation between economic preferences and psychological personality traits. Theory Decision, 89, 61-83.

Singh, Y., Adil, M. & Haque, S. M. I. (2022). Personality traits and behaviour biases: the moderating role of risk-tolerance. Quality & Quantity, 57, 3549-3573.

Tversky, A. & Kahneman, D. (1971). The belief in the "law of small numbers. Psychological Bulletin, 76(2), 105-110.

Weber, E. U. & Johnson, E. J. (2009). Mindful judgment and decision making. Annual Review of Psychology, 60, 53-85.




How to Cite

Ajmal, A., Kousar , R. ., & Fatima , I. . (2024). Psychosocial and Personality Factors in Economic Decision Making. Journal of Professional & Applied Psychology, 5(1), 34–46.