The concept of uncertainty in shaping the household investment behavior

Анотація

Today’s environmental conditions dictate the necessity of considering all aspects of activities through the uncertainty factor. The main reasons for uncertainty lie in the dynamism and variability of the environment in recent years. The COVID-19 pandemic also acted as a catalyst for increasing uncertainty in all spheres of life. The purpose of the article is to define the concept of "uncertainty" in the investment behavior of households. The essence of this definition is a combination of the objective state of the environment and the subjective state of households during their investment behavior. The paper proves that the concepts of risk and uncertainty are not the same. Uncertainty is the primary source and one of the causes of risks. To consider the uncertainty, the expediency of using the institutional-behavioral approach is substantiated. This approach involves considering the concept of uncertainty through the prism of two concepts – environmental uncertainty and personal uncertainty of households. The environmental uncertainty is considered from the standpoint of two main approaches – the ability to predict future events and the quality of information about future events. Based on the analysis of definitions, the concept of "environmental uncertainty" is proposed to be defined based on the factors of its formation: the state of ambiguity, the impossibility of accurately predicting future developments; state of absence or insufficiency of reliable information about future events; state of availability of an unlimited number of options for the development of events due to the lack of criteria for their optimality and efficiency. The personal uncertainty is proposed to be determined from the standpoint of behavioral context. It should be based on the individual psychological (behavioral) characteristics of households, which may affect the level of their uncertainty. The main behavioral features of household uncertainty are the ambiguity of motives, the variability of goals, lack of information, risk aversion, psychological unpreparedness, and emotional and forceful instability to the challenges of the environment. The proposed approach to the essence of the concept of "uncertainty" will allow making more informed and efficient decisions in the investment behavior of households.

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