The evaluation of the investment decision in Turkey in terms of rationality: A qualitative study within the framework of behavioral economics

Neo-classical economics, which sees the core issues of economics as the evaluation of economic events with their causes and consequences, has ignored the human and human behavior in their analysis. Human beings are always regarded as rational individuals, fully knowledged with a perfect prediction capacity, who act for their economic interests in a rational decision-making process. Neoclassical economics assumes that companies operating in the business world will also make their investment decisions according to the rational decision-making process. Despite this view, behavioral economists have been defending that neo-classical economists have isolated the economics from real life with their assumptions. The assumptions of the neo-classical economics have begun to be criticized, as the long-lasting impacts of the current crises endure and countries cannot find permanent solutions to their economic problems. The aim of this study is to evaluate the validity of neo-classical economic assumptions in Turkey by means of field studies. Within the scope of this study, in-depth face-to-face interviews were conducted with 13 participants from seven different sectors which have the largest share in the gross national income calculated according to the production method. Participants were selected as the professionals managing the leading firms of the certain sectors. During the interviews, semi-structured interview form was used, and the findings were analyzed with descriptive and content analysis techniques. As a result of this study, it is found that the absence of economic stability in Turkey has taken the investment decisions away from the rationality. At the same time, it has been reached that the assumptions of homo-economicus, rational human, accurate knowledge, costless information, perfect prediction, which are basic assumptions of neo-classical economics, remain weak for understanding the dynamics of Turkish economy. It is thought that the real and accurate information provided by the statistical institutions on a sectoral basis, reforms made to enhance the transparency of Turkish legal system and steps taken by the firms in the corporate governance approach will increase the rationality in the investment decisions. Keywords: Behavioral Economics, Homo-Economicus, Rational Behavior, Uncertainty, Expectation.