The role of emotions and cognitive biases in decision-making

PROJECT TYPE:

• Institutional scientific-research project of the Juraj Dobrila University of Pula.
• Research project (institutionally funded) in the field of social sciences and humanities, with emphasis on behavioral economics, neuroeconomics, and financial behavior.

PROJECT IMPLEMENTATION PERIOD:

• The project is planned to be implemented from October 1, 2025 to September 30, 2029, lasting 48 months from the start date.

PROJECT LEADER AND COLLABORATORS:

Project Leader

• Assoc. Prof. Saša Stjepanović, PhD Faculty of Economics and Tourism "Dr. Mijo Mirković", Juraj Dobrila University of Pula.

Saša Stjepanović is an Associate Professor at the Department of Economic Theory. His scientific work focuses on behavioral economics, neuroeconomics, econometrics, and macroeconomics. He especially studies the role of emotions and cognitive biases in economic behavior. He is the author of several scientific papers and actively participates in the development of interdisciplinary research and educational programs. As project leader, he coordinates research activities, methodology, and dissemination of results.

Research Team Members

• Prof. Marinko Škare, PhD Faculty of Economics and Tourism "Dr. Mijo Mirković".

A distinguished economist of international reputation, with extensive experience in macroeconomics, sustainable development, and economic growth. He participates in the project as an advisor on methodology and integration of economic indicators into the analytical framework.

• Prof. Daniel Tomić, PhD Faculty of Economics and Tourism "Dr. Mijo Mirković".

Expert in macroeconomic analyses and econometric models. He contributes to the quantitative processing of data and the development of statistical models of financial behavior.

• Prof. Dragan Benazić, PhD Faculty of Economics and Tourism "Dr. Mijo Mirković".

Specializes in marketing and consumer behavior. In the project, he analyzes the impact of market signals, emotions, and value perception among young consumers.

• Prof. Manuel Benazić, PhD Faculty of Economics and Tourism "Dr. Mijo Mirković".

Expert in finance and monetary policy. In the project, he examines the relationship between financial decision-making, the macroeconomic environment, and risk.

• Prof. Dean Učkar, PhD Faculty of Economics and Tourism "Dr. Mijo Mirković".

Works in the field of behavioral finance, particularly investment decisions and risk perception. In the project, he analyzes emotional and cognitive factors that shape financial decisions.

• Asst. Prof. Katarina Kapuralin, PhD Faculty of Biotechnology and Drug Development.

Expert in neuroscience, with experience in biomedical research. She contributes to the interpretation of neurophysiological and emotional processes during decision-making.

• Ivana Medica Ružić, PhD Jože Šuran Elementary School, Višnjan.

Participates as coordinator of educational activities and the transfer of project results into the education system. Her focus is on developing financial literacy competencies among young people.

• Renata Martinčić Marić, PhD Faculty of Educational Sciences.

Expert in developmental psychology. In the project, she analyzes cognitive and emotional development in the context of economic decision-making and educational application of results.

PROJECT SUMMARY:

The project “Neuroeconomic analysis of financial behavior among young people: The role of emotions and cognitive biases in decision-making (Nauko)” investigates how young people make financial decisions under conditions of risk and uncertainty. The focus is on understanding the role of emotions, cognitive biases, and risk perception in the decision-making process, with consideration of differences between younger and older generations.

Although financial decisions are often viewed as a rational process, contemporary research shows that consumption, saving, or investment choices are strongly influenced by unconscious psychological processes. Young people, particularly in digital environments, are exposed to fast information, social influences, and impulsive behavior, which can lead to financial decisions that lack long-term sustainability.

The project combines methods from behavioral economics, neuroeconomics, surveys, and experimental tasks, while some participants will take part in measurements of visual attention and emotional reactions (e.g., eye-tracking, EEG). In this way, the research links subjective attitudes with objective neurophysiological responses during decision-making.

Expected results include:

• Identification of key emotional and cognitive factors shaping the financial behavior of young people

• Comparison of decision-making patterns between generations

• Development of recommendations and educational materials for strengthening financial literacy and responsible money management

The project is conducted at the Juraj Dobrila University of Pula, in cooperation with multiple faculties and experts from economics, psychology, and neuroscience, contributing to the development of interdisciplinary science and educational practices.

PROJECT OBJECTIVES:

The main goal of the project is to determine how emotional processes and cognitive biases shape the financial choices of young people in everyday situations, including consumption, saving, and investment decisions. The project is based on the assumption that financial behavior is not solely the result of rational thinking, but is strongly influenced by psychological factors, social environment, and digital habits.

More broadly, the project aims to contribute to the understanding of differences between younger and older generations regarding risk assessment, confidence in financial decision-making, and the ability to plan long-term financial stability. By comparing generational patterns, it is possible to identify specific challenges young people face in a contemporary financial environment characterized by digital platforms, quick loans, online advertising, and social influences.

Specific objectives of the project include:

• Identifying key cognitive biases (e.g., loss aversion, overconfidence, status quo bias) affecting financial behavior

• Analyzing the role of emotions and stress responses in decision-making under risk

• Comparing intergenerational differences in financial decision-making, focusing on young people (18–30 years) and those over 50

• Developing research instruments (surveys, experimental tasks, behavioral protocols) for measuring financial behavior

• Creating educational recommendations and materials to strengthen financial literacy, self-control, and planning among young people

The final goal of the project is to provide scientifically grounded guidelines that can help educational institutions, policymakers, and financial advisors in financial education of young people, contributing to long-term economic security of individuals and society.

PROJECT HOLDER: Juraj Dobrila University of Pula