Understanding public participatory budgeting behavior: how cognitive biases shape public budget preferences

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Authors: Wenbin Li, Jia Yang, Xiaoxuan Chen
Cited by: 1
References: 54

Abstract

Purpose This study investigates how individual-level cognitive biases shape budgetary preferences in public participatory budgeting (PB), offering a micro-level perspective that complements the traditional research focus on collective decision-making processes. Design/methodology/approach Conducting an empirical generalization replication of Overmans and Grimmelikhuijsen's (2025) experiment, this study examines how cognitive biases (anchoring, herding, mental accounting and loss aversion) influence public budget allocations in local Chinese contexts. Controlled experimental scenarios were employed to analyze participants' budgetary preferences and identify systematic deviations resulting from underlying cognitive biases. Findings The results indicate that public budgeting decisions are significantly shaped by multiple cognitive biases: allocations exhibit anchoring effects from initial numerical values, demonstrate herding tendencies and generally favor gain-generating projects. Notably, the study found no statistically significant evidence of mental accounting or loss aversion, suggesting that the manifestation of cognitive biases is highly context- and subject-dependent. Originality/value This study contributes to the behavioral public administration literature through systematic validation of cognitive bias mechanisms in PB context, offering an integrated framework that bridges behavioral science and budgetary decision-making. Furthermore, the findings provide actionable policy guidance for developing bias-aware budgeting systems and establishing decision architectures that effectively reconcile behavioral insights with rational fiscal principles.

Fields of Study & Subjects

Public Policy and Administration Research Local Government Finance and Decentralization Fiscal Policies and Political Economy

Publication details

Journal / source
Journal of Public Budgeting Accounting & Financial Management
Publisher
Emerald
Volume
38
Issue
3
Pages
395–411
Publication date
2 April 2026
Language
EN